Crain's Detroit Business, June 25, 2018 issue by Crain's Detroit Business

Small crowds may have cost Tigers $20 million so far Page 5

Ken Daniels’ fund battles opioid addiction Page 3

JUNE 25 - JULY 1, 2018 | crainsdetroit.com COMMENTARY

Ford’s depot positions Michigan Ave. for transit corridor Bill Ford Jr.’s grand vision of developing a “transportation invention corridor” along Michigan Avenue and I-94 that stretches from the CHAD Michigan CenLIVENGOOD tral Station in Corktown to Dearborn, Willow Run and Ann Arbor is going to require some grand thinking and probably a pile of public and private money. Mobility is about to go from being a buzzword to a real situational challenge that confronts Ford Motor Co.’s bid to deploy autonomous vehicle technology from a train depot built when some Detroiters were still getting around town by horse and buggy. Ford has already deployed its Chariot rideshare vans along Michigan Avenue to shuttle employees between its Dearborn headquarters and its first Corktown building — The Factory — in what could be the precursor of having self-driving vehicles running along the avenue in the coming years. “They may not start off immediately as autonomous shuttles, but they eventually will be AV shuttles,” Bill Ford Jr. said in an interview with Crain’s Detroit Business and Automotive News. “Don’t know if those will be Chariots or not. Haven’t put too fine a point on it. We’re talking four years out now.” But, barring a major economic calamity, four years will come faster than most might expect as the auto industry undergoes rapid change. Rebuilding Michigan Avenue between Corktown and Dearborn and beyond to include two lanes dedicated to autonomous vehicles would be a tremendous undertaking involving local, state and federal government, as well as businesses along the corridor.

ITC executive uses expertise to help in Puerto Rico By Jay Greene jgreene@crain.com

Pedro Melendez’s intimate knowledge of electric utility transmission lines and Puerto Rico proved invaluable in the aftermath of Hurricane Maria, which struck his home country, friends and family with high Category 4 winds and rain on Sept. 20. Melendez, director of asset protection and performance with Novi-based ITC Holdings Corp., lost contact for several days with his parents, brothers and sisters as the island went dark. Finally, he was able to visit them in November for the first of three trips that totaled 77 days. He went with a

Need to know

 Novi-based ITC Holdings asked Pedro Melendez to share his expertise as part of a incident response team in the aftermath of Hurricane Maria in Puerto Rico

AF GROUP

In converting Lansing’s old coal power plant to the national headquarters of Accident Fund Insurance Co., new steel structure had to be built inside the building to create multiple floors of office space.

Accident Fund’s power plant HQ parallels Ford’s train station bid By Chad Livengood clivengood@crain.com

SEE LIVENGOOD, PAGE 21

Ford Motor Co.’s monumental challenge of restoring Detroit’s decrepit Michigan Central Station to its former glory has parallels to Accident Fund Insurance Co.’s conversion of a shuttered 1930s coal power plant in Lansing into its national headquarters. Decommissioned in 1992, the former Lansing Board of Water & Light plant sat mostly empty and unused for 15 years, blighting downtown Lansing’s riverfront in the same way Detroit’s long-vacant train station has

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Need to know

Decommissioned in 1992, the former Lansing Board of Water & Light plant sat mostly empty and unused for 15 years 

 Lansing insurance company spent $182 million turning plant into headquarters  'Altruism and business sense can pay off,' Blue Cross CEO Daniel Loepp says

been an eyesore on the Motor City’s skyline and psyche for the past three decades. Three blocks away, Accident Fund — now called AF Group — was bust-

Melendez  Electrical engineer Melendez was born on the island and has family and friends there  Initially, 95 percent of people lost power. After nine months, the system has been marginally improved but about 9,000 people still are without power

ing at the seams in the mid-2000s in shared downtown Lansing office space with its parent company, Blue Cross Blue Shield of Michigan. Senior leaders at the insurers and their construction consultants at The Christman Co. started looking at moving into existing downtown office buildings, the possibility of adding on to Blue Cross’ building or following other insurance companies in the Lansing area that have built sprawling suburban campuses on one-time greenfields.

10-member utility incident command team to survey damage to the grid and transmission lines, and to help his family and friends. It was the third-costliest hurricane on record with damages just in Puerto Rico exceeding more than $100 billion. The official death toll stands at 64, but news organizations including CNN and The New York Times, and Harvard University have estimated hundreds and possibly thousands of people died in the storm and its aftermath. More than 95 percent of the island’s 3.4 million residents lost power for weeks and millions were still out of power months after the initial strike.

SEE REMODEL, PAGE 20

SEE PUERTO RICO, PAGE 19

INSIDE

2017’s top deals, projects, people << Our inaugural Best In Class: Real Estate awards honor the region’s best deals — and dealmakers. Pages 10-14

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MICHIGAN BRIEFS

INSIDE

From staff and wire reports. Find the full stories at crainsdetroit.com

Business groups, teachers unions team up

Business groups and teachers unions have joined forces in a new statewide coalition that’s promoting a common student and teacher-centered agenda for education reform they plan to put before Michigan’s next governor. The coalition, called Launch Michigan, includes the corporate and university executives who make up Business Leaders for Michigan, the Detroit Regional Chamber, the Small Business Association of Michigan as well as the Michigan Education Association and American Federation of Teachers Michigan, two teachers unions representing 175,000 school employees. The diverse group of business, education and civic leaders have prioritized supporting the teaching profession, sticking with an established set of education standards and student assessments and creating a “fair and comprehensive accountability system that includes everyone who influences education — not just teachers.” More specific policy proposals will be developed in the coming months and ready for the next administration to consider during the transition after the November general election, said Doug Rothwell, president and CEO of

Business Leaders for Michigan. The statewide coalition of 30 organizations representing 600,000 individuals is modeled after the Coalition for the Future of Detroit Schoolchildren, a bipartisan group of Detroit leaders who were instrumental in advocating for a $617 million state rescue and restructuring of Detroit Public Schools in 2016. “That legislation wouldn’t have happened if we didn't have leaders from different political strides working the sides of the aisle they had influence on,” said AFT Michigan President Dave Hecker, who was a co-chair of the Detroit coalition. One of the coalition’s overarching goals is to put forward a united front to legislators and the next governor, urging them to maintain support for a set of policy initiatives through multiple election cycles, regardless of the party in power, said Bob Moore, deputy superintendent of Oakland Schools, the intermediate school district for Oakland County. “This is an essential element of something that can last not just for one year or to the next election, but multiple election cycles,” Moore said. “And keep everyone focused on a student-centered education system.”

GM investing $175M in Lansing plant

General Motors Co. is investing $175 million in a Lansing plant to

GENERAL MOTORS CO.

General Motors Co. will invest $175 million in its Lansing Grand River Assembly Plant for its next generation of Cadillac models.

build two of Cadillac’s next-generation sedans, Automotive News reported. GM, according to a spokeswoman, has already begun installing new tooling and equipment at the Lansing Grand River Assembly Plant, which now builds the Cadillac ATS compact and CTS midsize cars and Chevrolet Camaro. The new Cadillac sedans — expected to be named CT5 and CT4 — will

eventually replace the ATS, CTS and XTS large sedan in Cadillac’s car lineup. GM plans to discontinue Cadillac ATS sedan output after the 2018 model year. Production of the CT5 is expected to begin in 2019, followed shortly after by the CT4. The two cars are part of an extensive overhaul of the brand’s lineup that will include a new vehicle, on average, every six months through 2021.

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The latest investment comes two years after GM invested $211 million to support tooling and equipment and a 32,000-square-foot addition to the body shop for future Cadillac sedans. GM has spent $464 million in manufacturing for Cadillac vehicles in the past two years. Other major investments have taken place to expand Cadillac Escalade capacity and build the first Cadillac XT4 and XT5 crossovers. The new crossovers are expected to boost Cadillac’s U.S. sales, which fell 8 percent in 2017. Globally, Cadillac sales — led by China — increased 16 percent to 356,467 last year.

CORRECTION A story on p. 3 of the June 18 issue should have said that Forgotten Harvest only uses cash donations to purchase food when there is a dedicated contribution for doing so, such as with sponsored programs.

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HEALTH CARE

Hospitals use home health to cut costs of readmission

NONPROFITS

By Jay Greene jgreene@crain.com

Health care systems and home health companies in Michigan are developing expertise in managing post-hospitalization services and enjoying steady revenue growth and a reduction in inpatient readmission penalties imposed by the federal government. The parent company of Troy-based Residential Healthcare, Graham Healthcare Group, has completed a three-state integration plan that includes doubling down on its strategy of investing in joint ventures with hospital operators. It currently has five hospital joint venture partners, including Grand Rapids-based Mary Free Bed Rehabilitation Hospital, said David Curtis, CEO of Graham’s home health division. Partnering with hospitals in joint ventures is one of the strategies not only to add home health visits, but also hospice clients, said Justin DeWitte, CEO of Need Graham’s hosto know pice division. JJHospitals are Over the past working closely several years, a with home health growing number subsidiaries and of home health specialty home and hospice health/hospice companies have companies to build signed contracts growing postwith hospitals to acute care market manage patients after they get out JJResidential of the hospital. Healthcare in “We are interMichigan expands ested in doing into two other home health states under new partnerships and ownership and palliative care to builds on hospital help with chronjoint ventures ically ill patients,” JJBeaumont DeWitte said. Health finds “Hospitals need success in well-run compaconsolidation of nies working former competing with them.” home health DeWitte said companies hospital business has grown for Graham “more because of our ability to engage with people, transfer home health to hospice. We are doing more of that.” Beaumont Health, an eight-hospital health care system, recently consolidated its home health care and post-acute care operations several years after its merger with Oakwood Healthcare and Botsford Hospital. The health system is growing home health services at a 5 percent clip, said Paul LaCasse, D.O., Beaumont’s executive vice president of post-acute care and diversified business operations. SEE HOME, PAGE 18

Detroit Red Wings television play-by-play man Ken Daniels lost his son to an opioid overdose.

ASSOCIATED PRESS

Children’s Hospital foundation to administer Ken Daniels’ fund to battle opioid addiction By Sherri Welch swelch@crain.com

Children’s Hospital of Michigan Foundation will administer a new fund created by Detroit Red Wings announcer Ken Daniels and his family to combat opioid abuse in the wake of the overdose death of his son. The fund builds on several the $120 million foundation, independent of its namesake hospital, is now

managing as it evolves into a broader community foundation for children. The aim is to manage philanthropic assets that support children for donors and other nonprofits, in addition to making annual grants of about $6 million focused on community benefit, pediatric research and medical research from its own assets. “There are more opportunities to

fund programs that support our mission than we have funds for,” said foundation Chairman Matt Friedman, co-founder of public relations firm Tanner Friedman. Taking on the functions of a community foundation “allows us as a foundation to have a larger footprint and a greater impact,” he said. Children’s Hospital of Michigan Foundation has been focused on growth since it began operating in-

dependently of Children’s Hospital of Michigan after the Detroit Medical Center became a for-profit health system. One way to grow is through direct fundraising. “Another way is to align with others who have an interest in the mission and bring them in under our umbrella to work with us,” Friedman said. SEE FUND, PAGE 17

AUTO INSURANCE

Calley takes up no-fault alongside a Schuette ally By Chad Livengood clivengood@crain.com

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Oakland County Executive L. Brooks Patterson (right) is aligned with Lt. Gov. Brian Calley (left) on auto insurance reform that’s limited to establishing a medical fraud authority and making the state’s catastrophic drivers fund more transparent.

Lt. Gov. Brian Calley pitched his plan for lowering Michigan’s highestin-the-nation auto insurance premiums last week, alongside one of the most powerful voices in the yearslong debate over reforming the no-fault system who is supporting Calley’s chief opponent for the Republican nomination for governor. With less than seven weeks until the Aug. 7 primary, Calley proposed reforms that are part of the agenda of the medical providers that have been fighting auto insurance companies for years

in Lansing to preserve a system that affords injured drivers unlimited medical care without any caps on costs. Calley detailed the plan alongside Oakland County Executive L. Brooks Patterson, who has worked to defeat insurance industry-driven reform proposals that would gut medical benefits for drivers. Patterson has previously endorsed Attorney General Bill Schuette, Calley’s main Republican rival in the race for governor, creating an unusual alliance at a campaign event designed to help Calley’s bid to defeat Schuette. SEE CALLEY, PAGE 17

MUST READS OF THE WEEK FDA approves sending used pacemakers abroad

Blue Cross inks contract with Hygieia in Livonia

Ford Land chief talks train station deal, what’s next

World Medical Relief OK’d to deliver refurbished devices to Africa, South America and Middle East. Page 7

Deal with med device maker could radically improve diabetic care and lower costs by thousands of dollars per patient. Page 16

Dave Dubensky discusses Ford’s vision for Corktown, more construction projects and connecting with the community. Page 22

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WHEREVER YOUR TRAVELS TAKE YOU. Experience travel the way it should be.

COSWORTH

British automotive engineer Cosworth has opened a $50 million manufacturing plant in Shelby Township – its first in Michigan.

Cosworth opens $50 million plant in Shelby Township By Kurt Nagl knagl@crain.com

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British automotive engineering company Cosworth has opened its new $50 million production plant in Shelby Township — its first in Michigan. The 60,000-square-foot manufacturing facility is in the Cherry Creek Business Park off Shelby Parkway, just south of 24 Mile Road. Its neighbors include JVIS USA LLC, Epic Equipment and Engineering and Grupo Antolin, which recently opened a $61.2 million plant in the industrial park. Cosworth’s plant will manufacture V-8 cylinder heads, and it will be heavily automated, spokesman Jeff Fox said. It will employ 30 production peo-

By Chad Livengood

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In the battle for talent, first impressions can be everything. Morgan Cullen spent the summer of 2016 working as an intern at Ally Financial in downtown Detroit and found it different than other internships, where the full-time employees delivered warning messages: “Turn back. You’re too young to be here.” “That was not my experience with Ally,” said Cullen, who double-majored in political science and communications at the University of Michigan Ann Arbor. “I wasn’t just getting coffee. I was really doing meaningful work.” That experience led Cullen straight back to Ally’s enterprise marketing team when she graduated from UM a year ago. She now serves as a marketing analyst for the Detroit-based banking giant. Ally has gotten more strategic about college internships in recent years, going from as few as 10 companywide at the beginning of the decade to 128 interns this summer in Detroit, Charlotte, Jacksonville and suburban Dallas, said Kathie Patterson, chief human resources officer for Ally Financial. The expanded internship program has been built out of necessity to attract a highly skilled workforce, Patterson said. Ally company senior leaders developed a learning curriculum that focuses on giving the intern meaningful projects to work on as well as feed-

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 60,000-square-foot facility to employ about 130 workers  Neighbors include recently built Grupo Antolin facility 

Official grand opening Monday

ple and about 100 engineers, scientists and programmers. The plant is fully operational and undergoing preproduction approvals, with plans to be in full production by November. An invitation-only grand opening ceremony scheduled for Monday is expected to include Gov. Rick Snyder, Cosworth co-owner Jerry Forsythe and

other dignitaries. Construction on the new plant began in 2016 when the company received a $2.1 million Michigan Economic Development Corp. performance-based loan. Known for its high-performance engines in race cars, the Northampton, United Kingdom-based company was owned by Ford Motor Co. until 2004, when it was purchased by Jerry Forsythe and Kevin Kalkhoven, co-owners of the Champ Car World Series. They diversified the business with investments in mainstream automotive, aerospace and the defense industries. Its U.S. headquarters are in Indianapolis.

Ally internship program expands in a big way, aims for real work

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Morgan Cullen: Went back to Ally after graduating.

Kathie Patterson: Internships attract talent.

Need to know

 Ally Financial has gone from fewer than 10 interns in 2011 to 128 this summer  Detroit-based bank's internship program has expanded recruiting pipeline  Program built out a necessity to address talent shortage

back and guidance. Before, Patterson said, “there wasn’t an infrastructure.” And like full-time employees, interns at Ally are expected to do volunteer service work in Detroit and other communities where the bank has a large workforce. “That’s another way we’re assimilating them into our culture,” she said. Since revamping the internship program, Ally has hired 106 interns for full-time jobs in its nationwide workforce of 8,000. About 70 percent of interns return for a second internship, Patterson said. “It’s very common if we have a strong performer, we’re extending an offer to them to come back the next year,” she said.

The expanded internship program has given the auto and home lending bank the ability to forge new relationships with dozens of universities to recruit from, including Wayne State University, which has helped Ally recruit a more diverse workforce, Patterson said. Through the internship program, Ally has been able to fill jobs requiring specialized skills that finance majors at universities don’t have. Ally has hired graduates of Ferris State University’s mechanical automotive service technology program to work in its vehicle warranty call center because they have extensive knowledge of car parts, Patterson said. The automotive marketing and management program at Northwood University in Midland also has become a source of interns to work on Ally’s auto finance and insurance teams. Millennial interns at Ally also have been providing the company with studies of their own generation’s consumer spending habits — actionable business intelligence that might otherwise be farmed out to highpriced consultants. “Sometimes we make some assumptions that they’re not as capable,” Patterson said. “We’ve had to push our managers to say there’s nothing wrong to give them an assignment that you’d give a seasoned employee." Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Attendance decline at Comerica costs Tigers Need to know

By Bill Shea bshea@crain.com

Smaller crowds for Detroit Tigers games at Comerica Park may have cost the team about $20 million in revenue so far this season. The figure is based on estimated fan spending and the team’s attendance totals through the middle of June. Detroit is down nearly 26 percent in total attendance through the first 40 home games at Comerica Park this season, a drop of nearly 293,000 fans from 1.1 million at the same point last year to 846,613 so far this year. That decline is part of a wider attendance decline across Major League Baseball, which has seen the total number of fans through the turnstiles drop 6.5 percent through June 16 compared to the same period in 2017, according to analysis last week by Forbes. Nineteen of MLB’s 30 clubs are down at the gate versus last season. Baseball’s overall attendance has been flat in recent years, with this year’s declines being blamed on poor early season weather after a dull offseason that saw few teams spending to improve their rosters through free agency. Baseball drew 72.6 million fans last season. The peak was 79.5 million in 2007. The Tigers are down because they lost 90 games last season and fully committed to a multiyear rebuilding cycle that saw expensive stars like Justin Verlander traded last summer. In 2018, Detroit was expected to be among the worst teams but has generally performed a bit better than expected — perhaps staving off a worse attendance decline. The Fan Cost Index published early this year by Chicago-based sports intelligence firm Team Marketing Report offers a way to estimate the cost in dollars and cents. The report uses the cost of tickets, food, drinks, and ancillary items such as programs, ballcaps and parking to calculate how much it costs a family of four to attend each team’s games. By extrapolating the data from four to just a single fan, the cost for one person attending a Tigers game and making a few purchases is $68.40 — well below the major league average of $80.95. Taking that $68.40 and multiplying it against the nearly 293,000 fewer fans this season gives you the $20 million in less revenue collected in 2018. MLB taking in 1.8 million fewer fans so far this season means $150.6 million less in fan revenue overall, using the FCI data. Despite attendance declines, baseball was estimated to have brought in $10 billion as a whole in 2017, the most in MLB history. Taking in less revenue is an acute concern for the Tigers because under team President Chris Ilitch’s oversight, the club has to more rigidly live within a payroll budget than in the past. The business strategy deployed last year has meant trading talented, expensive veterans in return for young prospects who will remain under the team’s financial control for years to come. That’s a departure from late owner Mike Ilitch’s free-spending ways of big trades and big free-agent signings for big names and even bigger contracts.

JJBudget-bound Tigers are seeing millions less in fan revenue JJDetroit attendance is down 26 percent vs. 2018 JJMLB attendance has dropped 6.5 percent from last season

Chris Ilitch — who operates the club on behalf of his late father’s trust that owns the team — also has invested undisclosed sums to hire more scouts and staff for a fleshedout advanced analytics department. The long-term goal is to more smartly assemble talent to win games in a financially efficient way. Detroit cut $70 million in payroll from last season, leaving them $134.4 million in total player salaries in 2018. The Tigers don’t comment on their finances. Forbes estimated that the team had $277 million in revenue last season and ran a $46 million operating deficit — their seventh season in the past 10 operating in the red, per Forbes. The team doesn’t get to keep all of the revenue from merchandise and concessions sold during games. While the revenue split between the Tigers and its concessionaire, Buffalo-based Sportservice, has never been disclosed, industry insiders have told Crain’s that a typical ratio is 30 to 40 percent for the team and the rest for the company. Detroit is down nearly 26 percent in total attendance through the first 40 homes games at Comerica Park this season, a drop of nearly 293,000 fans from 1.1 million at the same point last year to 846,613 so far this year.

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World Medical Relief OK’d to deliver refurbished pacemakers to underserved countries “The process took time, but the FDA, which gets a lot of negative publicity about delays, interacted with us in a very positive way.”

By Jay Greene jgreene@crain.com

World Medical Relief in Southfield and its pacemaker refurbishment program have received U.S. Food and Drug Administration approval to begin shipping a supply of more than 5,000 pacemakers to underserved countries this year that include the 33 countries of Africa, Nicaragua and the Philippines. After nine years of planning, Kim Eagle, M.D., founder of the Project My Heart Your Heart pacemaker program, has been working with George Samson, CEO of World Medical Kim Eagle: Relief, and a host Founder of of other volunprogram. teers to garner FDA approval, granted earlier this year, to reuse the pacemakers and secure funding for the program. Many of the previously used pacemakers have been salvaged from bodies at funeral homes and crematories to give life and new hope to thousands of needy people with failing hearts, Eagle said. Pacemakers are implanted to correct a slow heartbeat. A slow heart rate can be caused by heart attacks, conduction diseases or old age and can lead to fainting and fatigue. “The process took time, but the FDA, which gets a lot of negative publicity about delays, interacted with us in a very positive way. They really challenged us about meeting industry standards for new devices, how they are sterilized and how they can be used in various places,” said Eagle, who is director of the Samuel and Jean Frankel Cardiovascular Center at the University of Michigan in Ann Arbor. Project My Heart Your Heart also received a substantial donation from Sheldon and Marian Davis. WMR’s pacemaker center has been renamed the Sheldon & Marion Davis Pacemaker Recycling Center. “His (Davis) business was related to pacemakers, and he wanted to make an impact on people who might die in a faraway place without a pacemaker,” Eagle said. An estimated 1 million to 2 million people die worldwide each year because they can’t afford a pacemaker, which in the U.S. costs about $5,000, not counting surgery, hospital stay and other care. But many heart patients and families in the United States have offered to donate their pacemakers after death. In February, Project My Heart Your Heart conducted its first pacemaker implant procedure at a Kenyan public health facility. The FDA, which oversees medical devices in the U.S., approves pacemakers to be used only once. It is believed the pacemaker center at World Medical Relief was the first organization to receive FDA approval. Eagle said the Davis donation and several others have ensured the project will continue for the next several years. “Beyond the FDA approval, we need space to receive the devices and analyze them, sterilize them and ensure we have a good process,” Eagle

Kim Eagle, M.D., founder of the Project My Heart Your Heart

follow-ups are conducted, he said. “We want this to become the standard of care. We have so many global health needs. This is interesting because it involves a wasted technology that is going to needy countries to save lives.” But first, Eagle said, the team must receive approval from UM’s institutional review board to do a randomized trial in countries for reuse. “We want to make sure the devices we are repurposing are safe,” he said. “There are so many places in the world where people are literally dying. We want to prove in a randomized way they are functioning in safe and effective way.” Other key partners in the pacemaker project include UM cardiologist Thomas Crawford, NEScientific of Waterbury, Conn., and the Michigan Clinical Outcomes Research and Reporting Program at the University of Michigan.

World Medical Relief growing

World Medical Relief volunteers sort donated pacemakers.

Need to know

J FDA approves sending used devices to Africa, South America and Middle East J Founder Dr. Kim Eagle says a half-million pacemakers are available for reuse in U.S. and Europe J Sheldon & Marion Davis Pacemaker Recycling Center is in Southfield

said.

Pacemaker cleaning process The pacemaker program has a pool of about 50 volunteers, about four of whom come every Saturday, said Josephine Jabara, WMR’s director of development and community affairs. There are also five volunteer device arrhythmia nurses.

At the 66,000-square-foot WMR headquarters, the pacemaker program occupies five rooms. Some donations of bins and pacemakers came from Implant Recycling of Sterling Heights. The company’s president, Brad Wasserman, joined the board last year. “The devices come in, and we look at them for exterior integrity,” Eagle said. “We check their battery life. It has to be at least four years to use. Then we clean them by removing the set screws where leafs come out. We test them to see if they behave in appropriate conditions. The design engineers have devised a way to evaluate use under various (climate) conditions.” Finally, the pacemakers are resealed, packaged and made ready for shipment.

WORLD MEDICAL RELIEF

Eagle estimates the program will send out tens of thousands of devices per year. But with at least 1 million people dying worldwide because they lack a pacemaker, that number falls way short of need, he said. “We think there are several hundred thousand devices per year made available in the U.S. The same number in Europe. There could be a half-million devices per year available,” he said.

The research angle Eagle said UM doctors also plan to closely track the pacemakers and patients who receive them in an online database. “There is a research side of it. We have a whole team in place to manage the database at every site” and annual

Founded in 1953 by Irene Auberlin to support Korean War orphans, World Medical Relief supplies mostly nongovernmental organizations with medical and surgical supplies through contributions from individuals, corporations, hospitals and physician organizations. Auberlin died in 1999 at 102. In 2015, World Medical Relief moved into its new Southfield headquarters at 21725 Melrose Ave. Over the years, the organization has expanded its mission by providing medical aid to thousands of underserved people in the Detroit metropolitan area and in more than 130 developing nations worldwide, including Haiti, the Dominican Republic, Belize, Russia, Africa and South America. In May, WMR received its sixth consecutive four-star rating from Charity Navigator that recognizes financial transparency, efficiency and accountability. Less than 1 percent of program expenses are spent on management and fundraising, Jabara said. “Our international program is still growing and is on track to ship at least 60 40-foot containers this year around the world,” Jabara said. An additional 25,000 people in metro Detroit received various necessary goods. WMR works with many local businesses and organizations to provide a range of services for low-income people. They include prescription drugs, durable medical equipment, medical supplies, ostomy supplies, liquid nutrition, adult briefs and bed pads. “We are currently in discussion with local clinics to collaborate even further,” she said. “The main focus is to provide greater access to dental care, insulin and inhalers.”

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OPINION COMMENTARY

The next hot neighborhood

hey say the way to a man’s heart is through his stomach. They should also mention that a great way to discover the next hot neighborhood is to find out where the new restaurants are opening. There seems to be a strong relationship between where all the new investment is going on for eateries and the hot real estate areas in our city. Restaurants seem to like company, so when you discover a new place and it becomes successful, it will almost always spawn neighbors immediately. You might think that a business would like to have a local market to itself, but for restaurants and retail,

KEITH CRAIN Editor-in-chief

it appears to be the opposite. Before you know it, you have a neighborhood that has started to thrive. We watched downtown, then Midtown, followed by Corktown, and

now we will have to watch where the entrepreneurs put their money next. You can be sure that soon to follow will be investment in housing, normally apartments first and then home rehabs. And few items build a tourist business more quickly than great new places to eat. Sure, restaurants aren’t the same as investing in a huge plant, but their flowering helps drive the hot reputation of Detroit. I am not sure where the next hot part of town will be after Corktown, but I have my hunches. If you want to figure it out, then keep a close eye on the menus.

Detroit has seen bicycle lanes and bike rental companies gain popularity.

Cities need transportation options I

read the June 18 column by Keith Crain about Detroit’s new bike lanes and wanted to share another perspective. As someone who runs a bicycle manufacturing company here in Detroit, I am obviously an advocate for bike lanes. More generally though, I am an advocate for urban planning that allows for many different ways of getting around. I’m not anti-car. I drive. But I believe that cars are over-represented in most of our cities. We pay a lot for automobiles. We spend our tax money on endless road work and repairs; we spend our disposable income on gas, car repairs, insurance, tickets and parking. We fight wars for oil. We often sacrifice our personal health for the convenience of driving, not to mention the many people who are injured or killed by cars every day. Personally, I find I am fatter and less happy when I live in a city built around driving. I love walking and taking subways when I visit London and New York. When I can’t take a train or tube, I like to ride a bike. I’m thrilled that the planning department has accommodated new ways for me and my fellow Detroiters to get around.

OTHER VOICES Zak Pashak

Mr. Crain’s point of view comes from the perspective that car ownership and use is a given, and that car infrastructure costs are also a given. He questions the cost of bike lanes but doesn’t consider the much higher costs of roads, traffic lights, overpasses, etc. It is odd to me that someone would be upset that another form of transportation would receive a fraction of that investment. I respectfully disagree with Mr. Crain’s position that bike lanes are a financial burden. The reason cities are starting to diversify transportation options for residents is because there is a financial benefit to doing so. Past generations sought to reduce traffic congestion by adding more roads, often destroying walkable and vibrant neighborhoods in the pro-

cess, only to find that they had actually increased traffic congestion. Human-scale cities were displaced by roadways and parking lots. The cost was not just financial. New solutions that consider a diversification of transportation options are more effective and less costly. Certainly, cars are beneficial to us, and we love our cars for myriad reasons, but what cities like Detroit are beginning to recognize is that the post-World War II investments in automotive infrastructure went too far. The new bike lanes in Detroit are a small step toward reclaiming a portion of the many square miles of room we handed over to our cars. This global trend is taking hold for a very good reason — people want to live in cities with more transportation options. The path forward for Detroit is not to stubbornly hold on to any specific identity. If we weren’t dynamic, we would still be milling flour and building ships. Detroit’s history is about not only embracing change, but innovating it. That’s how we became the Motor City in the first place. Zak Pashak is the owner of Detroit Bikes LLC.

LETTERS

El-Sayed absolutely credentialed to use term ‘physician’ On June 11, an article in Crain’s Detroit Business called Dr. Abdul ElSayed’s credentials as a doctor into question. As members of Michigan’s medical community, we would like to respond by disagreeing with the assessment provided in that article. Dr. ElSayed can rightly claim to be both a physician and an expert in public health and medicine. Dr. El-Sayed completed years of post-secondary training on his way to becoming an expert in public health and epidemiology. He completed two doctorates: one, a medical doctorate from the Vagelos College of Physicians and Surgeons at Columbia University, one of the top medical schools in the country, and a second doctorate in public health from the University of Oxford, where he was a Rhodes Scholar. His degree in medicine gave him the training in science and empathy to care for patients. During that time, he made clinical decisions and interacted with patients under the direct supervision of licensed physicians, providing insight into the day-to-day life of a physician. After this training, Dr. El-Sayed decided to pursue training in public health. This is distinct from the clinical training most patients experience when they are working with their physicians. Public health looks at the broader causes of disease and tries to prevent and manage them at the level of the community, city, state, or country. A possible analogy is that medical school and residency allow you to become an expert driver, but you do not learn how to build the car. Dr. ElSayed's training gives him the unique experience of doing both. The article in Crain’s focuses on the fact that Dr. El-Sayed chose to forego a residency in order to take a faculty position at Columbia, a choice that he has been completely honest and transparent about. To claim that his decision to accept an assistant professorship in epidemiology after medical school makes him any less of a doctor or physician is a misguided interpretation that overlooks the realities of health care and medicine in America. Health care is a tremendously complex endeavor. Clinical training is one important field, but no less or more important than training in public health. If either one is done poorly, then our communities suffer. As a sub-intern in medical school, Dr. El-Sayed would have received extensive clinical skills training like all other medical school students. He was deeply involved in patient care and treatment, and part of the diagnostic team that delivers a diagnosis to patients. He is familiar with the issues of patient care and thinks about the world the way a physician does. As doctors, we know that people like Dr. El-Sayed who pursue nonclinical careers to address the problems of health and apply their training in a unique way should be celebrated. It’s a choice we encourage our colleagues and students to pursue. Our system has served us well for over a century, but we need a new way of thinking to make it more cost and clinically effective.

Dr. El-Sayed’s contributions to medicine and public health in the years after earning his medical degree are impressive. He has published over 100 academic articles, papers, abstracts, and book chapters, including a textbook titled “Systems Science and Population Health” he was the lead editor on. His decision to devote himself to public service instead of pursuing a residency speaks to his unique skill set and to his determination to solve the complex problems of inequity in health. In summary, Dr. El-Sayed is by all definitions credentialed to use the term physician. He has the experience to speak about the patient experiences he saw in medical school. His public health training also gives him unique insight into our public health system. This insight could potentially improve the lives of millions of Michiganders. We believe that calling his undeniable credentials into question takes away from the debate our state needs to have on its future. As a result, we disagree with the tone and sentiment of the piece. As physicians who have taught students and residents, offered insights into public policy, performed research, and cared for thousands of patients, we feel compelled to set the record straight. Steven Gay, M.D., dean of admissions, University of Michigan Medical School, and associate professor of medicine Muzammil Ahmed, M.D., chief of medical staff, Beaumont Wayne Hospital; partner, Comprehensive Urology; and clinical assistant professor, Wayne State University Iltefat Hamzavi, M.D., Department of Dermatology, Henry Ford Hospital

Ford should consider mass transit as well

Kudos to Crain’s Detroit Business reporter Kirk Pinho and colleagues for the outstanding coverage of the Michigan Central Depot story. Past is prologue. It is of historical note that Ford will reportedly be using the facility and the Corktown area for transportation research purposes. In the 1970s, Ford was also extremely involved in transportation research. The company had a research arm called ACT, the Automatically Controlled Transportation or Activity Center Transit System. ACT concentrated on a bi-directional travel on a single rail where rail cars passed each other by switching onto short bypass lanes. Ford, many of your readers may recall, installed its new elevated rail system at the Fairlane Town Center in Dearborn. It has since been disassembled. Ford, at the time, was extremely serious about developing alternative, people-mover-type urban transportation systems. ACT, at the time, was considered by the then-Urban Mass Transportation Administration’s plan to sponsor three or four such systems in U.S. cities, as well as for the GO-Urban Project in Toronto. Although Ford was prepared to install ACT at several other locations, its only system was installed in Dearborn, and other projects were put on indefinite hold. SEE LETTERS, PAGE 9

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Michigan a model for retirement system debt

he vast majority of public pension plans in the United States are dangerously underfunded, squeezing government budgets to the point where benefits promised to retirees and vital community services are threatened. Michigan has long been a model for how to look ahead and create long-term solutions for broken public retirement systems, becoming the first state to close pensions to new state workers some 20 years ago. Reforms to contain health care costs for state and public school employees followed, and just last year, the state moved to fix a school employee pension system that was only about 60 percent funded and devouring more than a third of school payroll costs. We approved a law requiring new hires to default into a very competitive defined contribution plan mirroring the one offered to state employees. These changes should stop Michigan from digging a deeper hole of retirement-related debt. And now, the state is on the brink of another important moment — beginning to fill in the hole, erase debt and truly create a brighter financial future for our children and grandchildren. A bill unanimously approved in the legislature and recently signed into law by Gov. Rick Snyder eliminates a faulty assumption in methodology for paying off school retirement system debt. The old methodology — unfortunately used by many public pensions in the U.S. — is the “level percent of payroll” system. It relies on using the same percentage of payroll annually to pay off debt, and assumes debt payments will grow every year because payroll will grow every year. In Michigan, the public school

OTHER VOICES Thomas Albert

pension system assumed that school payroll would grow by 3.5 percent every year — and debt payments would grow right along with it, eliminating unfunded liabilities by 2038. But this

plan had a massive flaw. School payroll in Michigan has dropped an average of about 2 percent annually since 2004. Michigan simply wasn’t keeping pace with the debt retirement schedule, and the climb up the system’s mountain of debt got steeper every year. If the current trend of payroll decline were to continue, then the consequences would be catastrophic. Debt payments would consume school payroll to unsustainable levels, and paying off debt by 2038 would no longer be an option. Extending the payments beyond 2038 would cost taxpayers billions of additional dollars.

Under the new methodology, Michigan will lower its school payroll growth assumption gradually, eventually hitting zero and transitioning to a “level dollar” method of payment. This will end the practice of backloading Michigan’s pension debt, creating a more predictable and sustainable payment plan — much like a fixed-rate home or car loan schedule. During this process I came to the sad realization that few people in government care about cash flows 10 to 15 years away. Luckily, Michigan has leaders — including Snyder — who realized the need for looking be-

yond a budget cycle or two and planning for the future. Other state governments should examine their debt repayment plans and ensure they are sustainable. The consequences of not looking down the road will be very expensive to taxpayers. Compound interest is an amazing force, and it can work against you as strongly as it can work for you. Thomas Albert has been a member of the Michigan House of Representatives since 2017. He previously worked as an investor for the State of Michigan Retirement Systems.

Why Crain’s Leadership Academy? Promoting leaders from within your organization is smart – some research suggests that leaders promoted from within a company have higher productivity gains than outside recruits. The Academy is a unique five-session program that pulls promising leaders and executives together to build their innate management strengths and form lasting professional relationships. Participants leave ready to lead and grow. How would you rate your overall satisfaction with Leadership Academy?

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LETTERS FROM PAGE 8

Now that Ford and other automotive companies are doing research on autonomous cars for the driving public, Ford might consider also restarting its urban transportation research plans to provide affordable mass transportation for the nondriving public. Detroit could then stake the claim as being the “National Urban Transportation Center.” Ford can become the leader of BOTH the autonomous driven car AND mass urban transportation research. One such demonstration project would be to build its own system from the Michigan Central Depot to connect with the Detroit People Mover to downtown Detroit, and, a connection from the Depot to a connector at Metropolitan Detroit Airport. Ford should also consider making these connections a public-private partnership undertaking with the City of Detroit and the Michigan Department of Transportation. Joe Neussendorfer Livonia

More on WJR Hear Crain’s Group Publisher Mary Kramer and Managing Editor Michael Lee talk about the week’s stories every Monday morning on WJR 760 AM’s Paul W. Smith Show.

of surveyed graduates said satisfied or extremely satisfied

of surveyed graduates said agree or strongly agree

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of surveyed graduates said agree or strongly agree

Ideal participants have a minimum of seven years business experience, and/or manage a team, and who are on the fast track for increased responsibility at any level of an organization. Participants have represented mid-size enterprises, nonprofits, Fortune 500 companies and educational institutions. For more information, contact Keenan Covington at kcovington@crain.com or 313-446-0417. You can also visit www.crainsdetroit.com/leadershipacademy.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

FOCUS

BEST IN CLASS: REAL ESTATE

LARRY PEPLIN FOR CRAIN’S

Project of the year: Little Caesars Arena, Detroit, Page 12.

2017’s top deals, projects, people

ast year was a year for dealmaking — and dealmakers.

In this, our inaugural Best In Class: Real Estate awards, we aim to honor both. We solicited nominations from you, our readers, for the most impactful deals, projects and people in commercial real estate in 2017.

With help from a panel of expert judges, Crain’s selected a winner in each of eight categories intended to represent the best in local commercial real estate. Read about them on Pages 11-14. Profiles by Kirk Pinho

Industrial leases of the year: Amazon distribution centers, Page 13

Developer of the year: The Platform LLC, Peter Cummings, Page 11

Developer of the year: The Platform LLC, Dietrich Knoer, Page 11

Young gun of the year: Chase Cantrell, Page 11

Office sale of the year: Masco property, Page 14

Industrial sale of the year: Michigan Motion Picture Studios building and land, Page 12

Broker of the year: Bryan Bender, Page 13

Office lease of the year: Autoliv ASP Inc., Page 14

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

BEST IN CLASS: REAL ESTATE

Developer of the year

for sale or lease 985 & 1080 entrance drive

Auburn Hills, MI 48326

office, technology & Research buildings available Corporate neighbors include: Comerica & Chrysler Abundant parking with easy access to all building entrances

Peter Cummings

Baltimore Station at 6402 Woodward Ave. south of Grand Boulevard is a project of The Platform LLC.

985 entrance drive - ± 55,672 SF

The Platform LLC Detroit

Dietrich Knoer

In less than three years, Detroit-based The Platform LLC has become one of the most formidable development companies in the city. Headed up by Peter Cummings and Dietrich Knoer, it has projects underway in its New Center area home base, as well as neighborhoods outside of the greater downtown, including northwest Detroit and Islandview, among others. It has been completing projects along Woodward Avenue and West Grand Boulevard, and has its eyes set on many more developments and redevelopments in the coming years.

Young gun of the year

Chase Cantrell Executive director and founder Building Community Value, Detroit Chase Cantrell’s journey through the commercial real estate world has taken him from law firms to the nonprofit sector in his effort to help build generational wealth in Detroit. A former real estate attorney with Dykema Gossett PLLC and Kotz Sangster Wysocki PC, Cantrell now runs Detroit-based Building Community Value, which manages the Better Buildings, Better Blocks program for Detroit, Hamtramck and Highland Park residents. The program, which is $100, teaches participants how to complete small real estate developments. Building Community Value is supported by heavy-hitting organizations like the John S. and James L. Knight Foundation, Ford Motor Company Fund and the Salzburg Global Seminar. He and his private equity fund, Cooperative Capital, have also launched Detroit Community Capital, which invests in Detroit, Hamtramck and Highland Park real estate projects. In his previous career as a real es-

Mortgage $5,100,000 Auto Dealership BIRMINGHAM

1080 entrance drive - ± 50,000 SF

F O R M O R E I N F O R M AT I O N , P L E A S E C O N TA C T :

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248.324.2000 W W W . F R I E D M A N R E A L E S T A T E . C O M

Permanent Loan $69,000,000 Class A Office Building TROY

Line of Credit $3,000,000

Real Estate $5,800,000

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Chase Cantrell

tate attorney, he worked on largescale Detroit developments like Broderick Tower and The Auburn.

Business relationships built block by block.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

BEST IN CLASS: REAL ESTATE

Project of the year Little Caesars Arena Olympia Development of Michigan Inc., Detroit

Little Caesars Arena opened in 2017 for the Detroit Red Wings and Detroit construction and redevelopment projects have been announced in the months leading up to and since the arena opened in September, bringing Pistons and is the anchor for the Ilitch family’s District Detroit developthings like new office, residential and hotel space to Detroit. ment area spanning 45 to 50 blocks in the area north of downtown. New

Industrial sale of the year Michigan Motion Picture Studios building and land, Pontiac Williams International Co. LLC Brokerage: Signature Associates Inc., Southfield

Commerce Township-based defense contractor Williams International Co. LLC is leaving its headquarters for Pontiac, a move that is expected to create 400 jobs by 2022. It’s a big win for the city, which for years teetered on insolvency and has been picking up some key economic development victories in the last couple years.

The company paid $44 million for the Michigan Motion Picture Studios building at 1999 Centerpoint Parkway and two adjacent vacant parcels spanning 120 acres and a nearby building, at 2001 Centerpoint Parkway, for its expansion project. Linden Nelson, John Rakolta Jr. and Robert Taubman were the sellers.

Michigan Motion Picture Studios building, Pontiac

Littl Detr Detr Pist

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Broker of the year

Bryan Bender Partner and managing director, Fortis Net Lease Farmington Hills Bryan Bender has carved a niche for himself in brokerage in his decade of working in commercial real estate. The 33-year-old partner and managing director of Fortis Net Lease in Farmington Hills has sold over 660 dollar stores like Dollar Tree, Family Dollar and Dollar General in 31 states. The store buildings cost a lot more than a dollar. In the last five years, his

sale volumes have totaled $730 million. In 2017, he sold 92 such stores with a total deal value of nearly $139 million — an average of nearly two sales per week. The University of Michigan graduate also helped build a website marketing dollar stores for sale, currently with several dozen listings, mostly in the eastern half of the U.S. Real estate is a bit of a tradition for Bender and his brothers.

“I am very fortunate to have an older brother, Robert Bender (managing partner at Fortis Net Lease) who was already in the commercial real estate brokerage industry, who offered me the great opportunity to work with him,” Bryan Bender said. “To this day Rob is still not only a mentor, but also one of the most talented and most successful brokers I know.” His younger brother, Andrew, is also a partner with Fortis Net Lease.

Bryan Bender

LARRY PEPLIN FOR CRAIN’S

Little Caesars Arena in downtown Detroit opened in 2017 and houses the Detroit Red Wings and the Detroit Pistons.

Amazon distribution center in Livonia.

Industrial leases of the year Amazon.com Inc., Seattle Three distribution centers: Shelby Township, Livonia, Romulus Brokerage: Signature Associates Inc., Southfield

Online retail giant Amazon.com Inc. has three distribution centers in the works totaling about 3 million square feet in Wayne and Macomb counties, with much of the space being leased in the last year or so. They are located in Shelby Township at a former Visteon Corp. auto parts

plant; at 13000 Eckles Road in Livonia on former General Motors property; and in Romulus on 84 acres north of Detroit Metropolitan Airport, bounded roughly by Smith, Vining and Ecorse roads. The company is slated to employ no fewer than 3,500 in Michigan.

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BEST IN CLASS: REAL ESTATE

Office sale of the year Former Masco Corp. headquarters sale, Taylor Buyer: Core Partners LLC, Bingham Farms

Former Masco Corp. headquarters, Taylor

Broker: Colliers International Inc. An entity tied to Bingham Farms-based real estate companies Core Partners LLC and Burton-Katzman LLC purchased the former Masco Corp. headquarters for about $11.6 million and landed Ford Motor

Co. as its sole tenant across more than 550,000 square feet. The deal in Taylor brought approximately 1,000 employees to the property at 21001 and 21111 Van Born Road just north of I-94.

Office lease of the year Autoliv ASP Inc., Southfield

26545 American Drive, Southfield

Landlord: Jonna Realty Ventures Inc., Bloomfield Hills Brokerage: Signature Associates Inc., Southfield This 179,300-square-foot lease at 26545 American Drive in Southfield represented a $22.6 million investment by Autoliv ASP Inc. to consolidate four Southeast Michigan operations into one location. The company, the North American subsidiary of Sweden-based auto supplier Autoliv Inc., was expected to create nearly 400 new engineering jobs as part of the build-to-suit project, which brought a new building to the Southfield market as well. The company had two leased properties in Farmington Hills and two leased properties in Southfield.

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Suburban Collection to open McLaren showroom By Jack Walsworth Automotive News

United Kingdom-based McLaren Automotive is expanding its U.S. retail footprint by partnering with one of the largest dealership groups in the country, the Suburban Collection, for a new store in Troy. McLaren Troy will open a 4,000-square-foot showroom in the Troy Motor Mall. A temporary sales and service site will open this month and the store will open in the fourth quarter, the automaker said. “The state of Michigan is a key area in the United States that we have not yet been able to properly

Need to know

JJBritish automaker partners with

Suburban Collection

JJWill open a 4,000-square-foot showroom in Troy JJCompany is amid a product blitz that calls for 15 new models through 2022

service,” Tony Joseph, president of McLaren North America, said in a statement. “With a deep base of both existing clients and potential customers in the region, we felt that Detroit and the surrounding areas needed a more localized point of

sales and service.” The Suburban Collection is No. 14 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 36,785 new vehicles in 2017. With the Troy store, McLaren’s dealership roll in North America will rise to 24, including three locations in Canada. Last month, McLaren broke ground on a dealership in Bellevue, Wash., near Seattle. North America is the largest market for the British automaker. McLaren sold 1,294 vehicles in North America last year, according to the Automotive News Data Center.

DEALS & DETAILS

CALENDAR WEDNESDAY, JUNE 27 Tech Takeover: Leveraging AI to Build Reliable Products. 7:45-9:30 a.m. Automation Alley. Speaker B Vijayakumar, practice lead, digital consulting and solutions, Hinduja Tech, will present information about how companies can leverage artificial intelligence to build more reliable products and services. Free members; $20 nonmembers. Automation Alley, Troy. Phone: (800) 427-5100; email: info@automationalley.com

UPCOMING EVENTS Tech Takeover: Industry 4.0 & The New Frontier of Innovation. 7:459:30 a.m. July 11. Automation Alley. Information about how companies can apply digital technologies on their factory floors. Hear case studies on how organizations are using the Industrial Internet of Things (IIoT) to accelerate innovation and growth, discover why every organization needs an augmented reality strategy. Speaker: Howard Heppelmann, divisional vice president and general manager, Connected Operations Solutions, PTC. Automation Alley. $10 members; $20 nonmembers. Phone: (800) 427-5100; email: info@ automationalley.com Tech Tuesdays: The Impact Of Robotics and Automation on Small Manufacturers. 8 a.m.-1 p.m. July 17. Lawrence Technological University. Session shares how companies are applying automation and robotics technology to improve the delivery of durable goods quicker and at better margins. Presentations by Dan Radomski, mentor in residence, LTU Collaboratory; Corey Carolla, Red Rabbit Automation/Vickers Engineering; Mike Foster, Behco-MRM; Ryan Astor, ARM and LTU Robotics Engineering summer camp students. Lawrence Technological University. Free with online registration. Contact: Mark Brucki, email: mbrucki@ltu.edu. Website: ltucollaboratory.com/events/tech-tuesdays-robotics-and-automation/ Government Contracting 101. 9 a.m.-noon. July 19. Schoolcraft College. What does it take to become a successful government contractor? What services and resources are available to a small business pursuing the government market? Seminar will give insight to companies

MCLAREN AUTOMOTIVE

U.K.-based sports car maker McLaren Automotive plans a 4,000-square-foot showroom in the Troy Motor Mall in late 2018.

considering the field of government contracting. Schoolcraft College, Livonia. $45. Contact: Kara or Shannon, phone: (734) 462-4438; email: ptac@schoolcraft.edu Apprenticeship Info Session: Addressing the Manufacturing Talent Shortage. 9:30-11:30 a.m. July 24. Automation Alley. Information session to learn more about implementing a registered apprenticeship program and about ApprenticeshipUSA, a Department of Labor funded grant partnership between Automation Alley and the state of Michigan. Speakers: Marybeth Koski, Department of Labor, Employment and Training Administration; Collin Mays, talent development coordinator, Southeast Michigan Community Alliance (SEMCA) and Karol Friedman, director, partnerships and talent, Automation Alley. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: Karol Friedman, email: podsiadlikl@automationalley.com Lead Your Company To The Top: Strategic Planning Workshop. 8:30-10:30 a.m. July 25. Michigan Manufacturing Technology Center. Program to help determine performance in comparison to competitors while identifying potential areas for improvement. Free. Michigan Manufacturing Technology Center, Plymouth. Contact: Theresa Gaston, phone: (734) 451-4208; email: inquiry@the-center.org; website: the-center.org Everything is a Presentation with Michael Angelo Caruso. 5:30-7:30 p.m. July 26. TiE Detroit. Speaker Michael Angelo Caruso, founder and president of Edison House, an international consulting firm specializing in corporate and personal improvement. Caruso TechTown — The Garage. Free. Contact: Jacqueline Perry, phone: (248) 254-4087; email: jacquelinep@ kyyba.com; website: detroit.tie.org Social Media for Business Growth. 9-11:30 a.m. Aug. 15. Oakland County Economic and Community Affairs. Terry Bean, Motor

City Connect, will present what works, what to avoid and how to use LinkedIn, YouTube, Facebook and Twitter. Topics include: three things to do to find success on Bean each platform, how to use status updates that gain attention, ways to manage priorities, how to make posting simpler and fastest way to grow an audience. $40. Oakland County Executive Office Building Conference Center, Waterford. Phone: (248) 858-0783; email: smallbusiness@oakgov.com Measuring the Effectiveness of Goals with Metrics. 8:30 a.m.10:30 a.m. Aug. 16. Michigan Manufacturing Technology Center. Program helps assess a company’s performance, establish relevant business metrics and prevent goals from being missed in the future. Workshop is focused on achieving positive organizational change. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: Theresa Gaston, phone: (734) 4514208; email: inquiry@the-center. org; website: the-center.org Marshall Plan for Talent Workshop. 1-3:30 p.m. Aug. 16. Lawrence Te c h n o l o g i c a l University. Roger Curtis, director of the Michigan Department of Talent and Economic Development, will provide an overview of Gov. Rick Snyder’s Marshall Plan for Talent to prepare Curtis students and adults for jobs. Free with online registration. Lawrence Technological University. Contact: Mark Brucki, email: mbrucki@ltu.edu To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

MERGERS & ACQUISITIONS JJPLW CPA PLLC, Shelby Township, a CPA firm, has acquired the CPA firm Cech, Rosso & Company PC, Sterling Heights. Both firms provide tax, accounting, bookkeeping and business valuation services. Website: plwcpa.com

CONTRACTS J Fourmidable Group Inc., Bingham Farms, a real estate management company, is now managing agent for Seneca Oaks Apartments, a community of 154 multi-family units in Youngstown, Ohio. Website: fourmidable.com

EXPANSIONS J BorgWarner Inc., Auburn Hills, an automotive components and parts supplier, has opened a 100,000-square-foot technical center in Noblesville, Ind. Combining operations from existing facilities in Anderson and Pendleton, Ind., the new technical center includes a state-ofthe-art lab, expanding the prototype building and testing capabilities for its electrified products. Website: borgwarner.com J White Glove Workshops, Birmingham, a digital marketing company specializing in planning, managing and promoting educational seminars, has expanded its service offerings to Canada. Website: whitegloveworkshops.com

NEW PRODUCTS J Gale Group Inc., Farmington Hills, part of Cengage Learning Inc. and a publisher of research and reference resources, is introducing a digital archive

of Amateur Newspapers from the American Antiquarian Society, providing newspaper writings published by the younger generation of the 19th century showing how youth viewed themselves, their hometowns, the country and the world around them during the era. Website: gale.com JJPet Supplies Plus, Livonia, a pet retail franchise, has added a line of grainfree jerky dog treats to its Redford Naturals product line. The line is now available in all Pet Supplies Plus stores. Website: petsuppliesplus.com. J ProQuest LLC, Ann Arbor, an information technology company, has added support for two new Google Scholar features, giving academic researchers round-the-clock access to scholarly full-text articles and graduate works from anywhere in the world. Google Scholar Campus Activated Subscriber Access gives students and faculty a way to retrieve content including journals, dissertations and theses when they’re studying or working remotely. Mobile access with Quick Abstracts improves the workflow of researchers who use their mobile phones to search and retrieve ProQuest content. Website: proquest.com J StockX, Detroit, an online “stock market of things,” has added Supreme skate decks, Fear of God streetwear and a collection of KAWS figures and apparel to its marketplace. Website: stockx.com

NEW SERVICES J Reverie, Bloomfield Hills, a sleep technology company, launched Reverie Sleep Coach service, one-onone guidance to help people achieve better sleep. Website: reverie.com

Submit Deals & Details items to cdbdepartments@crain.com

PEOPLE HOSPITALITY J Murice Amici to director of food operations, Twin Lakes Golf and Swim Club, Oakland Township, from owner, Ocean Breeze Restaurant, Shelby Township.

INSURANCE Matt Frantti to vice president, personal lines, Sterling Insurance Group, J

Sterling Heights, from assistant regional vice president, The Hanover, Detroit. Also, Joan Giffels to marketing manager from marketing specialist, Michigan.com, Detroit, and Steve Arce to corporate producer from merchant account executive, Entertainment Publications Ltd., Detroit. To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

Blue Cross contracts with Hygieia Trinity Health in Livonia for diabetes care services center to

manage Cabrini Clinic in Detroit

By Jay Greene jgreene@crain.com

Hygieia Inc., a medical device company based in Livonia, has contracted with Blue Cross Blue Shield of Michigan to offer its d-Nav insulin guidance service for Blue Cross PPO members and Blue Care Network HMO members with type 2 diabetes. More than 30 million people in the U.S. have diabetes, according to the U.S. Centers for Disease Control and Prevention. The vast majority of them have Type 2 diabetes, where the body resists the effects of insulin it produces, or doesn’t produce enough. Many of them could be helped by d-Nav and more timely primary care, said Eran Bashan, Hygieia’s CEO and co-founder. The company estimates about 70,000 people in metro Detroit fall into the class of patients d-Nav was designed to help. Last year, Blue Cross completed a yearlong pilot study with Hygieia to test d-Nav with about 200 diabetic patients, and the results showed great clinical improvement and lower costs, Bashan said. “We finished (a pilot study) in January with over 200 patients,” said Bashan, adding: “For the patients we targeted, they had pharmacy savings of $6,000 per patient per year. Across all patients, pharmacy savings were over $1,700.” Bashan said 97 percent of patients also reduced their blood sugar, or HbA1c, glucose levels to under 9 percent. The average age of the study group was 60, and they had been on insulin an average seven years and had an HbA1c level above 9.5 percent, he said. The normal level for nondiabetics

By Jay Greene jgreene@crain.com

Hygieia’s d-Nav insulin delivery system uses cloud-based software to analyze blood sugar levels.

should be between 3.9 and 5.5 percent. The d-Nav system, which is about the size of a cellphone, uses cloudbased software to analyze blood sugar levels and, with the help of health care professionals and primary care doctors, tell patients how much dosage they should give themselves based on body chemistry. In a statement, Blue Cross said it has been evaluating d-Nav to assist its members with chronic diseases. “We’ve been pleased and impressed by the results we’ve seen to date,” Ann Baker, Blue Cross’ vice president of care management, said in a statement. “Nearly 90 percent of individuals who participated in the d-Nav Service Health Economic Evaluation were better able to manage their insulin therapy and, consequently, eliminate their need for newer, expensive medications. This ultimately lowered the cost of Type 2 diabetes while also helping

patients attain better glycemic control.” Hygieia has said the use of the d-Nav service could save up to $100 million in pharmacy and other health care costs for diabetic patients in Michigan. “We can get 90 percent of patients improved in three months and in nine months get their HbA1c levels under 9,” Bashan said. Under the three-year agreement, Hygieia will make available to Blue Cross and Blue Care members with type 2 diabetes its d-Nav system at no cost. Bashan said Hygieia has opened a small clinic in Livonia that it will staff with 10 employees to serve Blue Cross and Blue Care members. He estimated the staff will double over time as the volume of patients grows. “We are starting in Southeast Michigan and will continue to the west side of the state in Kalamazoo next year,” Bashan said.

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Community Living Services Lisa Ballien has accepted the position of Executive Director of the Community Living Services Oakland County Division. Ballien has been the Director of Community Supports for CLS-OC for 14 years and, along with outgoing Executive Director Annette Downey, started the division in 2004 from the ground up. Lisa has worked at CLS for 26 years. She’s a graduate of the University of Michigan and is a licensed Social Worker. She will assume her new role on Monday, June 18th.

KNOW SOMEONE ON THE MOVE? For more information or questions regarding advertising in this section, please call Debora Stein at (917) 226-5470 or email: dstein@crain.com

The St. Frances Cabrini Clinic, one of the oldest free health clinics in America and based in Detroit, has contracted for management and executive services with Mercy Primary Care Center, a health center in Detroit owned by Livonia-based Trinity Health. Under the agreement, Mercy Primary Care will contribute funding for the center’s operations for the next three years. “There is a misconception that there is no longer a need for free clinics due to the AfNeed fordable Care to know Act,” Tawana J Mercy Primary Nettles-RobinHealth Center will son, the execumanage Cabrini tive director of the Mercy PrimaJ It’s one of the ry Care Center oldest free clinics and Cabrini Clinin the U.S., ic, said in a stateaffiliated with the ment. Archdiocese of “However, we Detroit are seeing an inJ Three-year crease in the agreement number of peoprovides funding to ple who are unkeep clinic open to insured in metro its 250 patients Detroit as indiper month viduals and families continue to have a difficult time getting and staying insured even under Medicaid expansion. One of the largest issues continues to be access to needed medication, which people can’t afford when they are uninsured.” Founded in 1950 by Monsignor Clem Kern, Cabrini is at 1234 Porter St. in the Corktown neighborhood of southwest Detroit. It derived its name from St. Frances Cabrini, the patron saint of immigrants and hospital administrators, who was the first naturalized U.S. citizen to be declared a saint in 1946. The Cabrini Clinic has been affiliated with the Most Holy Trinity Catholic Parish under the Archdiocese of Detroit. Cabrini’s three-person staff, which includes a nurse practitioner, social worker and front desk receptionist, will continue to serve patients at the clinic. The clinic also has more than 100 volunteers from local hospitals, including primary care physicians, pharmacists, psychiatrists, podiatrists and a gynecologist. It is open three days a week and has about 3,000 visits a year treating around 250 patients a month, many with chronic diseases. “I am very appreciative to Trinity Health, a Catholic health care system, for their willingness to manage our clinic,” Monsignor Charles Kosanke, pastor of Most Holy Trinity Parish, said in a statement. “This agreement will effectively allow the clinic to continue its legacy of assisting those who are experiencing poverty with quality health care. I believe that it is a win-win situation.” In 2014, longtime Cabrini Clinic director Sister Mary Ellen Howard retired after 19 years. She was replaced by Kelly Herron, who left in late 2017 for Trinity Health.

SPOTLIGHT PVS Chemicals announces transition

PVS Chemicals Inc. has announced new executive appointments as part of its succession plan as the Detroit company looks to keep it in the family. After three years as president and CEO, Jim M. Nicholson, 51, will become co-chairman of the Jim Nicholson c o m p a n y alongside his 75-year-old father, James B. Nicholson. Jim M. Nicholson’s brother David Nicholson, 48, who has served as CEO for PVS David Nicholson manufacturing assets, will take the reins as president and CEO of the global manufacturer, distributor and marketer of basic chemicals. The planned successions will take effect July 1. “I couldn’t be prouder of the success we’ve earned under Jim M. as president,” James B. Nicholson said. “I’m looking forward to sharing the chairman’s role with him, and we both have great expectations as David takes the reins as President and CEO.”

Director of Office for New Americans to retire

The first director of the Michigan Office for New Americans is retiring from state government after leading the agency since its inception in 2014. Bing Goei, a 7 0 - y e a r- o l d immigrant from IndoneBing Goei sia, steps down June 29, according to spokesman Jason Moon. Karen Phillippi, who has worked in the office as deputy director since 2014, was named interim Karen Phillippi director. Phillippi, 48, worked previously at Detroit-based law firm Miller, Canfield, Paddock and Stone, where she worked for eight years in immigration services management. She graduated from Michigan State University in 1992 with a bachelor’s degree in anthropology. The Michigan Office for New Americans has four full-time employees with an annual budget of $467,300. Among several functions, it serves as coordinator for all executive branch agencies responsible for programs servicing immigrants, and engages in state and federal advocacy concerning immigration law and policy, according to its website.

June 25, 2018

FUND FROM PAGE 3

Daniels’ story It was nearly a year after his son’s death at the age of 23 when Daniels began to talk publicly last November about his son’s addiction and the path he was on toward recovery and a career as an attorney when he relapsed while in treatment in Florida. Jamie Daniels was a victim of the so-called “Florida Shuffle,” a scheme aimed at milking a person’s insurance coverage rather than putting them on a path to permanent recovery. Following his son’s death, Daniels said many reached out to him, including CBC Sports’ “Hockey Night in Canada” announcer Scott Oake, whose own son had died about five years earlier from an overdose. Oake told him, “At some point,

DETROIT BUSINESS C R A I N ’ S D E T R OCIRAIN T ’BS U SINE S S // J U N E 2 5 , 2 0 1 8 you’ll find your calling. Just give it time ... as dark as this is, something good will come from it,” Daniels said. He began to consider the idea of starting Matt Friedman: an independent Chairman of foundation in foundation. his son’s honor when he was introduced to Friedman by a mutual acquaintance He learned about the Children’s Hospital of Michigan Foundation, met President and CEO Lawrence Burns and knew he’d found a home for his son’s foundation. “I don’t think I’ve had peace of mind (until) meeting Matt and Larry the last few months. Just speaking with them and hearing what we can do. They gave me a purpose,” Daniels said. He is still working with Children’s

to determine what the fund will support but looking at options including drug abuse prevention education, scholarships and Hope not Handcuffs, a program of Families Against Narcotics, which was founded by Macomb County Judge Linda Davis. The more Children’s talked with Daniels, the more apparent their common interest in addressing the opioid crisis became, Friedman said. By taking on administrative functions for the new fund, it leaves Daniels free to be the face of the fund and to help raise money to support its causes. And with a staff of 18, the foundation is positioned to help Daniels establish an annual fundraising event as he’d like to do, Friedman said. The foundation will help the Jamie Daniels Foundation and other funds it houses raise money through special events and direct individual and corporate fundraising, Burns

Page17 17

said, noting that role will make it unique from other community foundations. “We have already started some discussions about what those fundraising opportunities will be along with Ken and his friends, along with possibly the Red Wings (and) possibly Fox Detroit,” Burns said, adding that the Jamie Daniels Foundation’s assets could be well into the six-figure range within six months. “Because of the doors Ken and his family will open up, I think we’ll have opportunities to develop new, positive relationships with other people in the community.”

Other pacts The pact with the Jamie Daniels Foundation is one of three Children’s has forged so far to administer assets and grants. Other funds include: J The Dick and Gail Purtan Family Endowment Fund, which supports

CALLEY FROM PAGE 3

“I made my endorsement and support in the race (for Schuette), but it doesn’t mean we can’t work together on important issues like this,” Patterson said. “This is not politics. This is trying to correct the abuses in the system.” Calley’s no-fault proposal calls for two reforms that have been generally well-received by members of both parties in Lansing, but routinely failed to pass when cobbled together with more controversial proposals. The first is a new state agency to investigate and root out fraud and overused medical procedures in auto insurance claims that insurers say drive up rates. Calley also wants the Michigan Catastrophic Claims Association’s books open to public inspection — something that’s been blocked by court rulings. The nearly $21 billion fund for severely injured drivers requiring lifelong medical and personal care is controlled by the insurance industry and shielded from the Michigan Freedom of Information Act. On July 1, the MCCA’s annual assessment on all insured vehicles increases 13 percent to $192. Calley said the MCCA’s books need to be open to give all sides “all the information we need to identify the cost to drivers.” “It will identify why it is that I’m paying $514 every six months for my coverage under the same laws as everybody else and places like Detroit are as much as 10 times more,” said Calley, who lives in Portland in Ionia County. A Crain’s analysis of industry data

The Crain’s Reader 26.5% influence the purchase of office/industrial and commerical space. Help them find you by advertising in Crain’s Real Estate Section. 313.446.6086 • FAX: 313.446. 034 7 E-Mail: cdbclassif ied@crain.com

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A Crain’s analysis of industry data last year showed total premium dollars collected by insurers for personal injury protection (PIP) soared by 278 percent in Michigan between 2000 and 2013, while medical costs rose by 145 percent to $3.2 billion, even though the number of motorists injured annually declined by 20 percent.

last year showed total premium dollars collected by insurers for personal injury protection (PIP) soared by 278 percent in Michigan between 2000 and 2013, while medical costs rose by 145 percent to $3.2 billion, even though the number of motorists injured annually declined by 20 percent. During those 14 years, Michigan's average cost per motorist soared by 210 percent to $75,600 — more than five times the next-highest state. Medical providers and trial attorneys in the Coalition Protecting Auto No Fault — which Calley has aligned himself with — have long contended the MCCA’s calculations for an annual fee drivers are assessed can’t be trusted because the actuarial assumptions used to set that rate are shrouded in secrecy.

Top leaders in the CPAN attended Calley’s press conference Wednesday in the Oakland County Board of Commissioners auditorium at the county government complex in Pontiac. CPAN President John Cornack said the high cost of insurance can't be blamed on medical providers because the industry’s expenses and actuarial assumptions are not closely examined and regulated by the state insurance department. “The reality is, none us really know” what drives up insurance costs, said Cornack, president of the Eisenhower Center, a traumatic brain injury rehab center in Ann Arbor. “There’s no transparency. (Insurers) can increase the rates any which way they want.” Unlike Michigan’s heavily regulated utilities, the state has a “file-and-use” system for auto insurance companies

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to file their rates with the insurance commissioner and then impose them on customers. John G. Prosser II, a partner in Health Partners Inc., a Farmington Hills-based company that provides inhome attendant care and skilled nursing for critically injured drivers, said an auto insurance fraud authority needs the ability investigate both the providers and insurers who often let bills languish for months. “I need there to be a fraud bureau where the door swings both ways,” said Prosser, who also attended Calley’s press conference. Prosser said he’s currently in court fighting insurers for $500,000 in unpaid claims — for the first quarter of this year alone. “We need a fraud bureau where it applies to insurance companies as

children’s cancer research and treatment. J The Evelyn Grace Foundation, with a mission to bring light to children and their families during dark times. J The Healing Kids Foundation, supporting efforts to help pediatric burn survivors and their families cover the costs of treatment that insurance does not. Children’s Hospital of Michigan Foundation is looking to the Community Foundation of Southeast Michigan — which manages assets of more than $900 million — and the Jewish Federation of Metropolitan Detroit/United Jewish Foundation, with its roughly $650 million in assets, as models for how a community foundation can grow and operate, Burns said. “If we can be half as successful as them, we’ll be doing great work.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch well,” Prosser said. “If they are practicing deny, delay and forced litigation, that’s the antithesis of the intention of the law.” CPAN members are planning a roundtable meeting with Calley this week, Prosser said. Calley also said he wants to end the “all or nothing approach” to auto insurance reform in the Legislature where a half-dozen or more major items are “packed into one gigantic bill” that eventually dies. Without mentioning names, Calley referenced Detroit Mayor Mike Duggan and House Speaker Tom Leonard’s failed effort last fall to push through a no-fault reform proposal that sought to dramatically curtail reimbursement rates for medical providers and let drivers choose to opt-out of unlimited medical coverage. “One of the major problems that has existed on this entire debate up until now is one side will go develop a policy without the other side at the table … and the result is very predictable: gridlock,” he said. “Our proposal will break that gridlock.” Schuette, a former state senator and congressman from Midland, has said he also supports battling fraud in the system and reining in “frivolous” lawsuits that drive up medical claims for injured drivers. The attorney general also wants to give drivers more choices and insurance coverage options, spokesman John Sellek said. “Bill has the leadership and legislative experience to be on the House and Senate floor to work the process and bring all sides to reform,” Sellek said Wednesday. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Samaritas prepares to receive immigrant children for care By Sherri Welch swelch@crain.com

Detroit-based Samaritas is still preparing to receive immigrant children and place them into transitional foster care, despite the executive order President Donald Trump signed last Wednesday. The order, which ends the administration’s policy of separating migrant children from their parents who were detained as they attempted to enter the U.S. illegally, did not say what would happen with the more than 2,300 immigrant children who have already been separated from their parents. But late last week, a senior Trump administration official said about 500 of the children who were separated from their families at the border have been reunited since May. The executive order could also have limited shelf life. Per the 1993 Flores v. Reno Supreme Court case, detained children from other countries cannot be held in government detention facilities for more than 20 days. That means that after 20 days, children could once again be separated from their parents. For now, Samaritas is proceeding with the understanding that it could take custody of 54-60 of the children separated from their parents at the border. “We have received no indication

SERGIO FLORES/BLOOMBERG

Demonstrators hold signs outside of a U.S. Border Patrol station in McAllen, Texas, last week, protesting President Donald Trump’s policy of separating immigrant children from parents who illegally cross the Mexican border.

that things will change,” President and CEO Vickie Thompson-Sandy said late Thursday. “Kids that have been separated won’t be grandfathered in.” “We will still need to respond to the needs of those kids” and attempt to place them with family members already living in the U.S., she said. At the federal Office of Refugee Resettlement’s request, Samaritas is preparing to relaunch two transitional

foster care programs for immigrant children coming to the U.S. One would place very young children in private foster homes while their relatives living in the U.S. are sought. It’s talking with Flint-based Wellspring Lutheran Services about serving as a subcontractee on another transitional program for older youth, a program they operated jointly in 2014-15 when large numbers of chil-

HOME

Graham’s hospital joint ventures

Three years after eight-hospital Beaumont Health was formed in 2014, Beaumont Home Health was born out of various service lines from the former organizations, said LaCasse. “We have about 1,000 FTEs and care to 12,000 patients in the seven-county area,” LaCasse said. “We believe home health is an essential piece of what we do. As we think about the future, volume-based care to value-based care, we want to increase the amount of care we do at home.” Barry Cargill, executive director of the Michigan Association for Home Care and Hospice, said health companies in Michigan have developed a variety of formal and informal partnerships with hospitals to improve patients’ experience and reduce readmissions. Besides equity positions, home health agencies work closely with hospitals on post-acute care delivery. “Any kind of joint venture that increases the opportunity for continuum of care is going to be a good thing for any home health agency and patients or clients,” Cargill said. Graham Health Care is a good example of a home health company that is blending patient care technology with a range of services to generate good care, Cargill said. “You want patients and clients to be working with partners who you trust and take care of patients and clients,” he said. But Cargill said health systems operating home health agencies are also seeing growth and success in managing post-acute care in an integrated way. “You want to create loyalty for patients so they always come back to your business,” he said. “It can be a hospital, nursing home or independent living facility.”

So far, Graham has five hospital equity joint venture arrangements and is seeking more. Besides Mary Free Bed, Graham has joint ventures in Illinois with Edward Hospital in Naperville, Elmhurst Memorial Healthcare and DuPage Medical Group in Downers Grove and Allegheny Health Network in Pittsburgh, Curtis said. “Hospitals are experts in inpatient care but they could use some help on post-acute care,” Curtis said. Over three years of the contract, Mary Free Bed’s home health business has grown 50 percent, as has Edward Hospital in Illinois, Curtis said. “Home health and hospice works more closely together than ever before,” DeWitte said. Randy DeNeff, Mary Free Bed’s CFO, said the hospital’s 60-40 joint investment with Graham has proved successful. The 60 percent share it owns with Graham covers all home health and hospice operations in West Michigan, including Kent County and the surrounding area up to Oceana County. “We never had post-acute care and decided part of our strategy we would add home health and nursing homes,” said DeNeff, adding that the nonprofit Mary Free Bed considered buying home health and nursing homes. Instead, it partnered with Graham for home health and Trinity Senior Living Services for long-term care. “At first, I was skeptical about partnering with a for-profit” for home health services, DeNeff said. “I shouldn’t have been. They do business the way health care should.” Besides adding a new revenue stream, DeNeff said quality improved as some inpatient rehab pa-

FROM PAGE 3

David Curtis: Hospitals can use help on postacute care.

Justin DeWitte: Home health, hospice work closely together.

Curtis said Graham’s strategy is to partner with any hospital or health system to help them manage post-acute care services. But LaCasse said Beaumont, like many large health systems, wants to continue to manage home health and hospice internally. He said Beaumont has never considered outsourcing those services. Other large health care systems in Michigan that operate their own home health and hospice subsidiaries or companies are Henry Ford Health System, Ascension Michigan, Spectrum Health, McLaren Healthcare and Trinity Health. “Part of the strategy is to keep the patient in the network. We can oversee quality and safety (better) in the home health division,” said LaCasse. LaCasse said Beaumont has increased the number of hospice patients in recent years. “There are more patients requesting hospice. We have staff who are educated and trained with discharge planning and physicians and identify those patients when appropriate for hospice,” he said. “We are trying to serve those patients and families and give them options.” DeWitte said hospice is more than just controlling pain or creating an environment for a patient to die at home. “Hospice is for the whole family, to support them and provide counseling at home,” he said.

dren were coming to the southern border of the U.S. from Central America. When the numbers dwindled, the program ended. In May, when the “zero tolerance” immigration policy was launched, the ORR asked Lutheran Immigration and Refugee Service, the national affiliate of Samaritas, to have its affiliates around the country prepare to take children into their transitional foster care programs, Thompson-Sandy said. Under the joint program, Samaritas would hold the contract, providing case management and communicating with immigration officials and working to find family members in the U.S. if possible or to transition them to a less restrictive placement like a foster family. Wellspring would house those children in group homes on its Farmington Hills campus, providing care and support. Samaritas is looking for bilingual teachers, tutors, social workers and therapists who can speak Spanish to work with the children while they are in transitional foster care. Samaritas applied to take up to 60 of the children who have been separated from their parents or guardians by the U.S. government. Thompson-Sandy said it expects to hear if it’s been approved for the contracts in the next week or so. When Samaritas managed the tran-

sitional foster program in 2014-15, it was able to place 100 percent of the kids in its custody with family members on average, in less than 30 days. It remains to be seen if it will be as successful this time, Thompson-Sandy said. “In 2014, our experience was that families readily stepped forward. It’s going to be a question today, I think, about how willing family members are to step forward, if they, too, are undocumented, given our climate.” Samaritas, which operates on an annual budget of about $100 million funding a range of services including senior living facilities, affordable housing, adoption and long-term foster care for 123 unaccompanied refugee children who came to the U.S. with prior authorization. It also provides resettlement services for refugees and immigrants, but much of that program has been idled with the policy shifts under the Trump administration. On Michigan’s west side, Bethany Christian Services, which provides foster care, adoption, resettlement and other services from its Grand Rapids location, is already placing foreign children who have been separated from their parents into transitional foster care.

tients are discharged more quickly into either a nursing home or home health care. In the past, discharges to the 12 or so home health agencies or several nursing homes were slower because of inadequate support at home or in the nursing home. “We provide follow-up care wherever they are discharged,” he said. “We can put a better product out there for patients.” Each month, DeNeff said Mary Free Bed discharges about 70 of its patients to its own home health services. “There are a little bit more” to other home health or hospice agencies it works with. The hospital also has struck a 5050 joint venture partnership for short-term rehabilitation patients with Trinity Senior Living Services for a 48-bed skilled nursing unit at the hospital, DeNeff said. “That is going quite well and quite popular with our patients,” he said. “The nursing home industry is quite a struggle. We are still trying to turn our first annual profit.”

cent in 2017, but that still costs Medicare billions of dollars a year. Curtis said hospital administrators tell him they have their hands full dealing with readmissions of patients with heart problems, pneumonia, joint replacements and other chronically ill patients. Moreover, private payers such as Blue Cross Blue Shield of Michigan want hospitals to beef up their post-acute care strategy to reduce readmissions, Curtis said. “Health systems are a lot of different businesses — hospitals, health plans, home health. Our point is we have a continuum strategy to work with them as an equity partner,” Curtis said. Last year, the Centers for Medicare and Medicaid Services’ readmission rule reached its maximum penalty and now deducts a full 3 percent from Medicare payments for hospitals that fully fail to meet their readmission targets. “Almost all hospitals are losing money” to the penalties, Curtis said. “Hospitals do a good job inside the hospital, but not good outside the hospital.” For example, despite significantly reducing readmissions, Beaumont Hospital in Royal Oak lost $2.4 million in Medicare reimbursement in 2018 with a 17.6 percent readmission rate, slightly above the national average of 15.3 percent. St. John Hospital and Medical Center in Detroit lost $277,000 in 2017 with a 16 percent readmission rate. And Henry Ford Hospital in Detroit lost $837,990 with a 16.8 percent readmission rates. The data came from Medicare’s Hospital Readmissions Reduction Program and Medicare cost reports by American Hospital Directory, a Louisville-based consulting company.

Working with hospitals to reduce readmissions Besides a new revenue source, Curtis said acute-care hospitals can benefit by working with home health and hospice companies in reducing inpatient readmissions. In October 2012, hospitals began paying financial penalties to Medicare for avoidable patient readmissions within 30 days of discharge that exceeded the national average for congestive heart failure, heart attack and pneumonia. Readmission penalties were part of cost-containment provisions in the Affordable Care Act of 2010 aimed at reducing costs and improving quality. Readmission rates averaged more than 20 percent six years ago before the penalties kicked in. Hospitals’ efforts cut that to 15.3 per-

Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

PUERTO RICO FROM PAGE 1

Nine months later, some 9,000 people, mostly in rural areas, are still without power provided by the government-owned Puerto Rico Electric Power Authority. “What happened with Puerto Rico is very personal for me,” Melendez said. “Maria marked the life of many people, including mine. Watching the news at home I had a devastating feeling. The winds and waters for over 48 hours were hitting” the island and there was nothing he could do, said Melendez, who has worked for ITC for 15 years and three years before that for DTE Energy Co. A track-and-field scholarship athlete at the University of Puerto Rico, Melendez, 41, came to Detroit in 2001 to get his master’s degree in electrical engineering at Wayne State University. He knew early on he wanted to work in the electric utility field. At ITC, he supervises a team of 14 employees that responds to outages in the company’s seven-state region and ensures power lines are safe and secure. ITC operates high-voltage transmission facilities with about 15,800 circuit miles of transmission line. During the first month after Hurricanes Irma and Maria struck the Caribbean and later the U.S. in September, the PREPA attempted repairs. But PREPA soon realized it was overmatched and sent an urgent request to the American Public Power Association and EEI Edison Electric Institute for assistance. EEI asked ITC and other member companies for help on Nov. 8 and Melendez landed in Puerto Rico on Nov. 13 for an initial 17-day stay. He also visited the country in December and January for 33 days and in March for another 27 days to hand over his work to PREPA and local contractors. But when Melendez first arrived, his first thought was to help his parents, Manuel and Lourdes, who are retired teachers and pastors of a local church in Orocovis, a small town in the center part of the island. “I brought my family food, supplies, an emergency generator, anything we could bring,” he said. “They were out of power for 197 days, but they were very resilient to the process (of restoration). I have a lot to learn from them.” However, Melendez was very concerned because his mother has a respiratory condition and most hospitals were initially out of commission and medicines in short supply. “I made sure they were covered for that. Every time I called they have a smile on their face,” he said. “The people of Puerto Rico are very appreciative, despite their government.” At that point on Melendez’s first trip, about 2 1/2 months into the recovery effort, he said 80 percent of the transmission system was still down and only a few hundred thousand people had power with generators running 24/7. Many hospitals and roads were still out of commission. “We can’t underestimate the significance of the event, how devastating it was,” Melendez said. “There were so many lines that could not go back into service. We needed to ensure a way to make the transmission system work.” Alongside the 10-member incident command team, Melendez used his expertise to aid in system restoration efforts with PREPA, the U.S. Army Corps of Engineers and the Federal Emergency Management Agency. He assessed the damage, planned for an orderly restoration

ITC HOLDINGS CORP.

Downed transmission lines in Puerto Rico, like this one seen from a helicopter, are still common in rural areas of the island nine months after Hurricane Maria.

process and coordinated work on transmission lines and substations. “We all came with a common heart and purpose to help customers,” he said. Besides helping his family and working on power restoration, Melendez also tried to help repair damaged community water systems, homes, churches and businesses. He delivered food and supplies to families in need.

Death and destruction By early December, the Puerto Rican government announced that 64 people had died because of the hurricane. But others who researched the death toll by surveying funeral homes and conducting other research estimated between 500 to as many as 8,400 had died. There also were 45 more people killed in Dominica, the Dominican Republic, Haiti, Guadalupe and the United States. Melendez said he doesn’t know the exact number, but he believes the death toll from Maria is much higher than the 64 reported by the government. Puerto Rico’s Gov. Ricardo Rosselló has promised a closer review, and news organizations are still petitioning the government for documents. “You have to be genuine. There were direct deaths, for example, people drowned because the river washed them out or the wind hit and people died. There are those direct deaths and then there are deaths because of the aftermath. People depend on essential services: food, medicine and shelter. There were a lot deaths from that. The overall stress and emotional and psychological impact had to do with the additional deaths,” Melendez said. Melendez estimates about 15 percent of Puerto Rico’s transmission system in need of repair, with about 99.4 percent of customers having been restored electricity. “The reality is this is a restoration process. No upgrades were done. The system in some areas is a little stronger, with new materials and new equipment,” he said. “It may withstand another (hurricane), but the system was not hardened along the way. The system is probably in the same condition, or a little better.”

Melendez said Puerto Rico’s poor financial condition has affected investment in its electric grid. “Underinvestment affects the way we serve customers. As the infrastructure ages, the same things will happen if we don't take action,” he said. Earlier this year, the Puerto Rican government announced that it would privatize its power system because of PREPA’s “deficient service.” Melendez said he can’t comment much on the privatization issue. However, he said it has been studied several times in the past. Over the past two decades, Puerto Rico has privatized its Medicaid and telephone systems. “I know something needs to occur to move the system forward,” Melendez said, adding: “Customers nowadays have different demands from the past. They want reliability, and they certainly would support improvement.” Ongoing investment to maintain the transmission system is one of the strengths of ITC that Puerto Rico could learn from, said Melendez. “We (ITC) provide a service, but the reverse of that is PREPA, which is going through turmoil with its financial situation and a large debt it has to deal with.” Melendez said PREPA was very unprepared both for Maria and Irma, a hurricane that struck the island two weeks earlier. “You must have a strong utility behind you. It is hard to look at what happened in Puerto Rico. I was very proud to be able to respond on behalf of ITC as we did.”

More needs to be done Melendez said there’s no substitute for future investment. “We have to focus on what matters most. To provide customers service and build resiliency, we have to make investments in the grid. This applies to the mainland and Puerto Rico. They can operate a good model, like ITC has shown the last 15 years, but they need to come together and focus on the customer to ensure they stay ahead.” Melendez said he plans to go back in August to visit his family, this time just as a visitor. Earlier this year, ITC won a special

“It may withstand another (hurricane), but the system was not hardened along the way.” — Pedro Melendez, director of asset protection and performance with ITC Holdings Corp.

Emergency Assistance Award from the Edison Electric Institute for its contributions to the emergency power restoration mission in Puerto Rico. ITC Holdings, which is the nation’s largest independent electric transmission company, was acquired by Fortis Inc. of Canada for about $1.3 billion in 2016. In 2003, ITC was formed after it spun off from DTE Energy Co.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

REMODEL FROM PAGE 1

Blue Cross CEO Daniel Loepp said a Lansing-area real estate broker gave him an audacious idea to explore: Could the landmark Art Deco power plant on the banks of the Grand River be turned into office space? “I went inside the first time, and there were more pigeons than windows,” Loepp said. “Some people thought I was delusional that I thought you could do something like this.” Like Detroit’s once-storied train station, Lansing’s old Ottawa Street power plant had been largely stripped of precious metals and fixtures by vandals and the building had suffered from years of neglect, said Steve Reynolds, vice president of services for AF Group. “It was a mess when we came in here,” Reynolds said during a recent tour of the nine-story, tiered building that resembles a wedding cake. Steven Roznowski, CEO of Lansing-based Christman Co., was skeptical a building that once billowed clouds of exhaust from coal-fired boilers could be the tidy office space of a major insurance company. “The real catalyst that made things go into the motion was the user — Blue Cross and the Accident Fund — who were willing to say, ‘You know what, let’s give this a shot,’” Roznowski said. Blue Cross had some prior experience in renovating an historic building in a downtown. In October 2004, the Blues moved their west Michigan regional office from the suburbs into the former Steketee’s department store building in downtown Grand Rapids. “We thought being part of an urban core, given what was going on in Grand Rapids, that it made sense to do it,” Loepp said. “As it turned out, I think there’d be an insurrection now if the folks in Grand Rapids were told they have to go back out into the suburbs.” For the Lansing project, tax incentives also were a driving factor in making the economics of the massive rehab project work when construction began in 2008 as the country plunged into a recession that had hit Michigan years earlier. About one-quarter of the $182 million cost was subsidized through tax incentives ranging from brownfield redevelopment tax increment financing and job-creation tax credits to state and federal historic rehabilitation tax credits. The $42 million in tax incentives made the cost of renovating the power plant about 6 percent higher than new construction on a greenfield site, Loepp said. At the time, Blue Cross and Accident Fund benefited from lower costs of construction materials and labor — and political leaders who were eager to have a major construction project putting people to work during the recession. “Everybody was rowing in the same direction,” Loepp said. “And to get something that complicated done, you almost have to have that, I think.” The renovation project itself lasted nearly three years, as an addition had to be built alongside a new 900-spot parking deck. An old parking garage that straddled Grand Avenue in front of the plant had to be torn down, and other other improvements were needed along the riverfront, Reynolds said. But the real construction challenge was inside the old power plant,

In converting Lansing’s old coal power plant to the office headquarters of Accident Fund Insurance Co., engineers and construction companies kept many of the plant’s structural features, such as the crane that was used to move coal and equipment around the hulking power plant.

“The real catalyst that made things go into the motion was the user — Blue Cross and the Accident Fund — who were willing to say, ‘You know what, let’s give this a shot.’” — Steven Roznowski, CEO of Christman Co.

AF GROUP

Accident Fund Insurance Co. bought the Lansing Board of Water & Light’s decommissioned coal power plant in 2007 and began a multi-year construction project to convert it into its national headquarters on the banks of the Grand River.

where new floors and structural steel beams had to be constructed in the open expanse of the plant where turbines, boilers and piles of coal once sat.

“We called it ship-in-a-bottle construction,” Roznowski said. Christman and architects at the global engineering firm HOK worked to preserve the building’s Art Deco

doors and features that remained intact. The original crane that ran along a track inside the plant remains in place inside the renovated building. In 2011, 580 AF Group employees

moved into the renovated power plant. The workers’ compensation insurance carrier now has 725 employees working in the building as well as about 75 contractors and long-term vendors. In Detroit’s Corktown neighborhood, Ford’s desire to build an urban campus is seen as the driving factor in its purchase of the train station from the Moroun family for an undisclosed sum.

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C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

LIVENGOOD FROM PAGE 1

AF GROUP

Christman construction’s CEO thinks Ford’s train station rehab could be a catalyst for transformational change of Corktown, Detroit’s oldest neighborhood. “Somebody’s got to say, ‘I want to be in that building, and I’m willing to take some chances,’” Roznowski said. “This is not typical construction that people do every day.” In the Lansing power plant, Blue Cross and Accident Fund leaders saw an opportunity to repurpose a skyline-defining building that seemed more likely to meet a wrecking ball than house an insurance company. AF Group is now the largest private employer in downtown Lansing, which is dominated by the state of Michigan’s workforce. Since AF Group moved in, Lansing’s waterfront has seen the construction of new residential housing and redevelopment of one-time industrial buildings across the river. “The impact it can have on an urban setting is pretty phenomenal,” Roznowski said. Loepp credits Ford Executive Chairman Bill Ford Jr. for “thinking outside of the box” with wanting to build a talent-attracting campus in Detroit’s urban core. “I’m a believer that if you can combine altruism and business sense, it can pay off,” Loepp said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

“The challenge is going to be that this will take longer than anyone sitting around the table will expect it to take,” said Kirk Steudle, director of the Michigan Department of Transportation and one of the thought leaders on planning for the advent of self-driving vehicles. If done right, Michigan Avenue from Detroit to Ann Arbor could become the country’s first truly connected corridor for the start of an era — possibly a long one — where robotic vehicles driven by artificial intelligence will share the roads with humans behind the wheel. It’s not unlike the early 20th century when Henry Ford’s Model Ts were sharing the cobblestone with horse-drawn carriages. If Ford Motor wants its autonomous vehicle technology to serve as more than an employee shuttle, the company is going to have to engage government officials, residents and businesses along Michigan Avenue as well as the SMART and DDOT bus systems in designing an integrated transportation system. “That’s the stuff that has to come into consideration,” Steudle said. “While a particular company wants to move employees from one building six to seven miles away to another building, the general public still wants to be able to move on the transit line along (Michigan Avenue).” And then there’s the original purpose of the train station — trains. The tracks are all still there. Freight trains roll by every day on their way to and from the Michigan Central Railway Tunnel under the Detroit River. It could still function as a train station and create a direct link to Detroit Metropolitan Airport and the immaculate and seemingly underutilized John Dingell Transit Center on Michigan Avenue in Dearborn, which could be used for commuter rail to Detroit or Ann Arbor. The Dearborn bus and train station is just under two miles from Ford’s Glass House headquarters. Bringing trains back to Detroit’s 105-year-old depot is an idea that Bill Ford said he’d “love” to see, but he noted it’s “not really within our control.” “If we ever do get regional transit here, which I’m a big proponent of, you can image the AVs talking to the trains, talking to the buses and all of the transportation systems working together,” Ford said. “In that respect, it would actually help our development if we had trains coming in.” Train service to the depot and autonomous shuttles that connect workers and visitors to downtown also would help fulfill Ford’s promise that the renovated Michigan Central Station’s concourse will be open to the public and that the hulking building won’t become “a corporate island.” But bringing trains back to the train station is a whole different horse to tame that leads back to metro Detroit’s long and fractious debate over mass transit. Detroit Mayor Mike Duggan and Wayne County Executive Warren Evans have effectively hit a wall along Eight Mile Road in trying to get a regional transit tax and plan on the November ballot. Macomb County Executive Mark Hackel and his Oakland County counterpart, L. Brooks Patterson, are having none of what Evans and Duggan are proposing, and

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CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Ford Motor Co. has brought its Chariot rideshare service to Detroit to shuttle Ford employees between its headquarters in Dearborn and its first building in Corktown, The Factory at the corner of Michigan Avenue and Rosa Parks Boulevard.

REPORTERS Tyler Clifford, breaking news. (313) 446-1612 or tclifford@crain.com Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter Covers health care. (313) 446-0325 or jgreene@crain.com Chad Livengood Covers Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl Breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho Covers real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or bshea@crain.com Dustin Walsh, senior reporter Covers economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

The John D. Dingell Transit Center in Dearborn could be a connection point for commuter rail service between Ann Arbor and Detroit. The $28 million train and bus station opened in 2015 and is less than two miles from Ford Motor Co.’s Glass House world headquarters.

the Big Four leaders are arguably more divided than ever on this central economic challenge. So now, with a major employer like Ford making big plans for developing future mobility solutions in Detroit, the time seems right for Wayne and Washtenaw counties to go it alone on a regional transit plan focused on fusing connections along Michigan Avenue and I-94. The two counties could put separate transit millages on the ballot to fund expanded bus service and the long-sought Detroit-to-Ann Arbor commuter rail that could connect the talent pool at the University of Michigan with Ford CEO Jim Hackett’s “knowledge cathedral” at Michigan Central Station. Bus rapid transit along Michigan Avenue could connect U-M’s research labs with autonomous vehicle testing at the American Center for Mobility at Willow Run, Ford’s headquarters in Dearborn and the brain hub in Corktown, where Ford is making plans for up to 5,000 autonomous vehicle tech workers. Commuter rail could bring the airport into the mix, helping fuel Wayne County’s aerotropolis district and residential development along the I-94 and Michigan Avenue corridor. Washtenaw County officials have signaled interest in teaming up with Wayne County, while Evans is still trying to salvage the Regional Transit

Authority. “That’s the horse I’m riding, and I’m going to continue to ride it, because I still think it makes sense,” Evans said in an interview. “I’m going to bet on the horse we rode this far. But if that doesn’t go, I certainly am more than open to looking at the options.” Evans’ horse is looking more and more like one that’s not going to leave the stable. MDOT’s Steudle notes how it took a decade to plan, develop and build the QLine on Woodward Avenue, a project that was fueled by business leaders and the philanthropy of the Kresge Foundation as the streetcar was seen as a catalyst for redevelopment along the north-south corridor. Ford’s plans for linking Corktown to Dearborn could be a similar catalyst for redevelopment along Michigan Avenue, where the storefronts in southwest Detroit remain predominately blighted and boarded up. “The challenge is, while four years is a long ways away, it really is a short time horizon for all of the pieces that have come together to make this happen,” Steudle said. “You can’t wait for two or three more years and then decide let’s do something in the last year. You really gotta be talking about it now.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

Q&A WITH DAVE DUBENSKY, CHAIRMAN AND CEO OF FORD LAND DEVELOPMENT CO.

Ford Land chief on the train station deal, what’s next Dave Dubensky is the chairman and CEO of Ford Land Development Co., the real estate arm of Ford Motor Co. The deal for Michigan Central Station closed on May 22; Dubensky talked with Crain’s real estate reporter Kirk Pinho about how the company moves forward with its large-scale redevelopment plan for the neighborhood west of downtown that’s anticipated to house 5,000 employees of Ford and other “partner” companies.

Dubensky and Pinho spoke at a small table inside the train station concourse shortly before Ford announced that it had bought the train station, for three decades emblematic of Detroit’s decline. At hand: How the contractor situation plays out, what other properties Ford is eyeing and how the Dearborn-based automotive giant makes sure the train station doesn’t become another Renaissance Center. Bill was saying something like he couldn’t have it be a “corporate island,” and I immediately thought of the Renaissance Center and 40 to 45 years ago, and how that effectively is walled off from all of Detroit, like a damn fortress. It has its own ZIP code. So how does that take shape? When it’s set back so far off Michigan Avenue? How do you reintroduce it to Corktown and Detroit?

Dave Dubensky: We actually became

the owner on the 22nd of May.

OK. What’s the overall plan here? Obviously this is the anchor. This is going to be public space and everything, but you also have other buildings.

Overall we are looking at 1.2 million square feet of mixed-use development. This is about 600,000, 650,000ish, so we are looking at one more building, an old brass factory. We are looking at that one. That one is not closed yet. We are still evaluating it from an environmental perspective. But it’s likely that one will close, and what we will do there is another 500,000- to 600,000-square-foot building. Both would be mixed-use and that anchors us in two locations in Corktown.

I think it starts with the programming and the space and involving the community. Where we are sitting right now, this space won’t be exclusive to Ford. It will be a coffee shop. It will be a restaurant. It will be cool retail experiences. It will be open to the community and they’ll be invited in. The park, activating the park in a cool way, so working the city and the parks department and the Corktown economic development group to try to activate that park in a wonderful way. So nothing about any of the developments we are going to do will be exclusive to Ford. I think the thought is that if we can get the right kind of retail in here, it will attract the people to come in and it won’t feel exclusive like the RenCen. We don’t intend to file for our own ZIP code for the place. (Laughter)

You’ll wipe that one out?

Yeah, from our perspective there’s no way to remediate the issues there. There are environmental issues there. Our teams tell me they gotta take out about 6 feet of soil. You’ve got to scrape out 6 feet of soil. It’s not historic, really no architectural value, so we’d probably scrape that one, take out the soil and build something new there. So you’ve got The Factory that we bought a little while ago. Right behind that you’d have another development. And then you’d have this (the train station).

If you do, let me know.

If you can involve the community in the programming process and get something in here that the community wants and values ...

Why get the Buhls involved in this? Why were they bird-dogging for you?

We didn’t consciously get the Buhls involved, but since we did the deal with the Buhls on The Factory building, we were just casually chatting, Tom said, “If you’re interested, I could make an introduction to Matt Moroun.” So Tom introduced me to Matt for the first time. No one sort of sought them out to get them involved. They just happened to be there, since we owned their building. You have heard Bill (Ford Jr.’s) broader vision. As we are trying to think about how to implement that broader vision, this came up. How is the process for picking contractors on all of these things going to go? Have you guys already done RFPs for architects, general contractors?

No, we have not. We are going to start that process with our purchasing team probably next week (the week of June 25). We want to get going on it now that the announcement is done. So we’ll look at everybody. We have big contractors that have worked with us for years and years and years. Walbridge.

Like Walbridge. And there’s others that are known for their historic restorations, so we’ll look at everybody and try to determine who we feel the most comfortable with.

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Dave Dubensky: “Where we are sitting right now, this space won’t be exclusive to Ford. It will be a coffee shop. It will be a restaurant. It will be cool retail experiences. It will be open to the community and they’ll be invited in.” Do you envision having separate contractors, for example — one GC on this (train station) and then another GC on another building?

Possibly. I mean, it’s a huge project with 1.2 million square feet. Look at the complexity of this (train station concourse). Trying to bring that back. So yeah, I can see multiple groups being involved. Ditto on the architecture side?

We are going to announce Snøhetta ... Oh yeah, they are working on your Dearborn campus.

Yeah, so Craig (Dykers, founding partner of Snøhetta) is going guide not only the Dearborn campus, but also guide us here as well. That’s not to say as a designer/architect he’s going to do everything; we would have some preservationist sort of architects that could be involved as well. But Craig is going to be our partner in Dearborn and here. Gensler was brought on, too?

Snøhetta and Gensler, and we have Gensler looking at program-

ming with Craig and Snøhetta. Probably for the last four or five months they have been trying to understand Ford. Gensler understands Ford a little bit, but Craig has to come in and understand what 30,000 people do, how we make cars, how we design cars. As you know, it’s a pretty complex process. As an architect designing space, you’ve got to understand that before you can make recommendations. Sure. Is Quinn Evans working on this too?

Quinn Evans helped us a little bit in the assessment, but we have not made any commitments to anybody going forward. Bill was saying something to the effect of the money for this Corktown project is basically going to be coming out of the budget for the Dearborn project. If I remember right, it was $1.2 billion or $1.3 billion (for Dearborn) ...

We never really announced or disclosed that. The way to think about it is that 2,500 Ford

employees will come down here. We know we are redoing the entire Dearborn campus. So I’ll literally not build for 2,500 on the Dearborn campus and repurpose that money for 2,500 people down here and build a different building. I’m just shifting monies that we had for 400,000 square feet of space, let’s just say, from there to here. You were saying 500,000 or 600,000 square feet of space on the site of the Alchemy building. Is that just office space? Will there be first-floor retail?

The specific programming is not done, so we don’t know exactly what’s going where. But again, everything we are thinking about is mixed-use, integrated in the community, not like Dearborn. Dearborn today has a big gate around the complex, and you can’t get in. That’s not what this is going to be. All the space will be open, for people, entrepreneurs, tech people. It will be something that won’t be a walled-off compound like we have today.

With regards to Roosevelt Park, there was a study or charrette that was done maybe last year. They put out a 45-50 page report with a few different treatments. Are you guys going to be using that when it comes to reprogramming Roosevelt Park?

I think it’s us participating in the process that the city already has, right? So the city, with the Corktown economic development group and us and others, will re-envision the park together. We have some thoughts and ideas, and I think every party is coming to those meetings with lots of ideas, and together we’ll come up with something. Do you guys anticipate taking Roosevelt Hotel or the hospital from Kefallinos?

I think we are done with our assemblage for now. We have enough property to do everything we want to do. Beyond what we talked about, the Alchemy side and this side, we acquired a little more land. Some of it is still in discussions, some of it is under contract. We have enough to do what we want. That’s not to say that in some point in the future we might not do more, but for now we are done. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 5 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Adient scraps downtown Detroit HQ plan

Como’s in Ferndale sells for $3.07 million

JUNE 15-21 | For more, visit crainsdetroit.com

dient plc will no longer move its headquarters to downtown De-

troit. The spinoff of Milwaukee-based Johnson Controls Inc. confirmed it has informed Detroit Mayor Mike Duggan of its decision to scrap its move into the Marquette Building on West Congress Street next to Cobo Center. Adient will remain in its current Plymouth Township headquarters, a spokeswoman said last week. “This is in no way a reflection on the city of Detroit or its outstanding revitalization efforts, but an internal decision by Adient that it can no longer fund the project in a way that will properly restore this historic gem to the city’s landscape,” Mary Kay Dodero said in an email to Crain’s. “We will work with the mayor’s office and other partners to make sure the Marquette Building goes to an owner who also appreciates the historic significance of the building.” Adient had planned to spend nearly $100 million on relocating its main office from Plymouth to the Marquette Building at 243 W. Congress St. The news comes a week after Bruce McDonald, its chairman and CEO, retired and former General Motors Co. CEO Frederick Henderson was named as interim CEO for the auto supplier. “I appreciate that Fritz Henderson came to me last week to advise me of their plans,” Duggan said last week in a message to Crain'’s. “I understand the business reasons for their decision, and I hope Adient has great success in resolving their current situation. I’ve asked that Adient put the Marquette Building back on the market as soon as practical, and I expect it to be a great headquarters building for another company wanting to relocate to Detroit.” The company has struggled to maintain consistent profitability since its spinoff, reporting a $1.5 billion loss in 2016 before recovering to a net income of $877 million last year. But financials have struggled again in fiscal year 2018, being dragged down by its money-losing seat structures and mechanisms division with its $3.3 billion in debt. In the second fiscal quarter of 2018, Adient reported a net loss of $168 million on revenue of $4.6 billion. The 164,000-square-foot Marquette Building is vacant and under renovation above the first floor, which is wrapped with signs saying, “Hello, Detroit. We can’t wait to be your neighbor.” A fire last month on the ninth floor did not affect Adient’s plans for the 111-year-old structure, Dodero said at the time. It would have been home to about 500 employees, including more than 100 new hires in such departments as legal, accounting, audit and treasury. It received a $2 million state incentive. The city also offered a property tax incentive, according to the MEDC. Adient is tax domiciled in Dublin, Ireland, and is estimated to be worth $17 billion. Mexican businessman Carlos Slim Helu bought the Marquette Building for $5.8 million in 2014 and sold it to Adient in 2016 for $16.9 million. The

T COSTAR

Wayne County Commissioners approved Thursday the sale of the Eloise Hospital Complex in Westland to developer Southfield-based Morgan Development for $1 and the contractual promise to invest at least $20 million into it.

Detroit digits A numbers-focused look at last week’s headlines:

4,500

The approximate number of people who turned out for Ford Motor Co.'s celebration last Tuesday of its purchase of Michigan Central Station in Detroit's Corktown.

$300,000

The amount the Michigan Department of Transportation would have paid to redo a half-mile of concrete on I-696, after work by a construction contractor did not meet quality standards, according to the Associated Press. The company agreed to do it again.

The number of organizations in a statewide coalition to promote a common student- and teacher-centered agenda for education reform.

company also paid about $19.23 million combined for a parking deck (November 2016) and surface parking lot (November 2017) in the last 18 months, according to city property records.

BUSINESS NEWS Emagine Entertainment Inc. is trying to place the Detroit movie theater it is planning with rapper Big Sean in the concourse of Michigan Central Station, according to an unnamed source. Ford Motor Co. officially announced last Tuesday its plans to renovate the long-vacant train depot as the star of a mobility-focused campus in Detroit’s Corktown neighborhood. J Detroit is the first stop on Chase for Business’ JPMorgan Chase & Co.’s inaugural nationwide tour with the BizMobile, a business advice center on wheels to reach entrepreneurs and startups. J ExperienceIT, an experiential training program founded by major Detroit-based IT businesses, will accept two dozen students for a free handson curriculum in the fall. J Live Cycle Delight, which offers exercise classes in Detroit’s West Village neighborhood, is expanding to a nearby location in The Coe development. It’ll have yoga, pilates and strength training classes there under a different name, LCD Hot. J The Sign of the Beefcarver in DearJ

born closed permanently last Monday, leaving the restaurant group with its flagship Royal Oak location as the only one standing. Company President Charles Pelzer said the closure came down to basic economics: They couldn’t pay the bills anymore. J Co-working space Patchwork Collective is setting up for an Aug. 1 opening date in Ferndale, just south of the trendy Oakland County city’s downtown. Shared work spaces are on the rise globally.

he new owner aiming to revive Como’s pizzeria and bar in Ferndale bought the building for a little over $3 million. Bloomfield Hills-based Peas and Carrots Hospitality LLC announced in early June it had closed on a deal for the once popular corner eatery that closed last year following food safety violations. The building sold for $3.074 million, according to county land records. It had been on the market for $4 million back in January. The

property sits in a prime downtown Ferndale location at Woodward Avenue and Nine Mile Road. It’s not known whether Peas & Carrots paid an additional price for the businesses’ name or other assets aside from the real estate. Como’s is looking to host popups later this summer and could reopen next spring, spokeswoman Caitlin McCarthy told Crain’s in early June. The owner aims to maintain its Italian and pizza menu.

OTHER NEWS J William Pickard, chairman and founder of GAA Manufacturing and Supply Chain Management, planned to make $2.1 million in gifts to Detroit institutions to support education and cultural programs. Recipients include the Charles H. Wright Museum of African American History and the Motown Museum. J Detroit City Council is backing a movement toward increasing wages for the city’s service workers, approving last Tuesday a resolution to support a $15-an-hour minimum wage. J The annual fireworks celebration over the Detroit River is marking its 60th year of lighting up the skyline of Detroit and neighboring Windsor Monday. The theme for the 24-minute Ford Fireworks extravaganza is “Come Alive in the D!” J U.S. Secretary of State Mike Pompeo applauds a push for economic diplomacy, but with caveats, he said last Monday at a Detroit Economic Club luncheon at Ford Field in Detroit. He addressed the nearly 400 attendees on “America’s Economic Revival,” highlighting the low unemployment rate, job creation and the GOP tax reform passed last year. J A construction company that poured about a half-mile of new concrete on a major Detroit-area freeway has agreed to do it again, The Associated Press reported. The Michigan Department of Transportation said the concrete on I-696 in Roseville poured last week did not meet quality standards. Spokesman Jeff Cranson said Interstate Highway Construction tore it up and is pouring it again at no additional cost to taxpayers. J Techstars Startup Week Detroit drew entrepreneurs to Detroit’s Grand Circus Park and surrounding buildings last week for events, discussion, networking and competitions.

OBITUARY J Ron Gurdjian, owner of Tom’s Tavern at 10093 W. Seven Mile Road on the city’s west side and a beloved bartender, died at 78.

A change in federal tax law concerning season ticket sales benefited the UM athletic department.

UM athletics budget benefits from Amazon series, tax law change F

ans rushing to beat the deadline for a sunsetting tax break on football season tickets and cash paid by the producer of a documentary about the football team helped the University of Michigan athletic department book a $2.5 million surplus for the fiscal year coming to an end. The department also is projecting a $2.5 million surplus for the upcoming year, according to a statement following a budget presentation to the university’s board of regents last week. Tallying the books on 2017-18 showed operating revenues of $188.1 million and operating expenses of $185.6 million, both department records. The budget for 2018-19 estimates $187.8 million in revenue and projected expenses of $185.3 million. “The fiscal year 2018 operating budget saw higher than expected revenues primarily due to an unbudgeted football program video series and preferred seating contributions that were made early as a result of a change in tax law,” the athletic department said in a statement.

The video series was Amazon Prime’s eight-part “All or Nothing: The Michigan Wolverines” that premiered in April. White Plains, N.Y.based The Montag Group paid Michigan $2.25 million for the right to produce the documentary, according to the Detroit Free Press. A change in federal tax law also benefited the athletic department. The Internal Revenue Series eliminating an 80 percent tax write-off for season ticket purchases apparently fueled a wave of buyers ahead of the Jan. 1 cut-off date, further generating revenue for UM. The Republican-led federal tax bill that became law Jan. 1 eliminated the charitable donation write-off that had been on the IRS books since the 1980s. For years, a charitable donation of $150 or more to UM’s Preferred Seat Donation program was required in return for the right to buy football season tickets. Donations in return for tickets accounted for $30.1 million of the UM athletic department’s budget last year.

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